The Government of Prime Minister Said Musa has every reason to exude optimism in the performance of the Belize economy as decision time approaches for the renewal of its political mandate.  This is the opinion being expressed by many economists across the region of Latin America and the Caribbean.

•             The overwhelming success of the Government’s debt exchange in February 2007 has improved the outlook for the fiscal and external accounts.

•             Renewed investor confidence and strong export performances allowed GDP to grow by an estimated 5.6% in 2006.

•             A continued focus on executing structural reforms within a disciplined budget allowed the Government to generate a primary surplus equal to 3.6% of GDP – the highest level in over 10 years.

•             Strong growth in exports and overnight tourism arrivals helped to reduce the current account deficit to just 2.0% of GDP in 2006 down from 14.4% of GDP in 2005.

Preliminary estimates indicate that the economy grew by 4.4% in the first half of 2007 due principally to the new Chalillo hydroelectric production, expansion in the wholesale and resale sector concentrated in the commercial free zone and increased petroleum exports.

The rate of GDP growth is expected to be moderate in 2007 due mainly to the very negative impact of Hurricane Dean which caused loss and damage estimated at US$100 million mainly in the Agricultural sector.  The unprecedented increase in world oil prices now heading for US$100.00 a barrel is posing a serious challenge; a drain on foreign exchange with an inflationary effect in the price of imported goods.

But even in the face of such adversities, economic growth is expected to be maintained to at least 3% - a tribute to our hard working producers and service providers, working hand in hand with a responsible Government.  The overall deficit for 2007 fell to 2.1% of GDP, an improvement of 2.7 percentage points of GDP against the 2005 level.

International reserves more than doubled during 2006 to end the year at US$86 million with an improved balance of payments picture.  Belize qualified for the policy based loans from the IDB, CDB as well as receiving concessional funding from its bilateral partners such as the Commonwealth Debt Initiative, Taiwan and Venezuela.

Freely available reserves stood at US$96.1 at the end of August 2007 providing 2 months worth of import cover; this is the highest level since the first quarter of 2005.

The big story of 2007 is the dramatic increase in direct foreign investment especially in the energy and tourism sectors.

Several new private sector investments are now coming on stream.

•             The US$50 million VACA hydro facility.

•             The US$62 million Belcogen project.

•             Major hotels and condominiums in excess of US$50 million.

•             Oil production with increased investment by BNE (in the millions) holds the promise of a booming industry in the years ahead.

Taking a boat ride along the north coast of San Pedro Ambergris Caye one cannot fail to be amazed at the many new resorts built over the last five years.  The construction boom continues.  Less noticed but equally impressive are the many new hotels and condos being built in the Southern Belize – Hopkins and the Placencia Peninsula.

All this growth and development translate into hundreds of new jobs stimulating a surge in small and medium enterprises throughout the country.  The 2007 Labour Force Survey reveals the tremendous progress achieved in improving the quality of life of the Belizean people.

•             88.8% of households now have access to electricity.

•             87.7% of Belizeans now have access to piped drinking water.

•             66% of Belizean families now own their homes.

•             76% of Belizean families now own a piece of land.

Unemployment has fallen from a high of 14% during the depressing nightmare period of the UDP regime to 8.5% today.

A truly remarkable recovery!  As we continue to diversify, innovate and improve our productive capacity, Belize is showing the world that small is beautiful.