Belize

Activity continues to be driven by tourism

The strong post-pandemic rebound is losing momentum, which will result in lower growth during 2025 that will approach the country's potential growth level. Nevertheless, it will continue to be driven by very strong performance in services (73% of GDP in 2023), particularly tourism, with visitor numbers expected to keep rising. The completion and continued development of new investments in hotels, transportation, and other infrastructure are expected, which will boost both tourism and construction. Several private cruise port projects are under development. To speed up completion, the Belizean government expropriated the extension of the Port Coral cruise terminal on Stake Bank Island, as its unfinished state was blocking the entire site. The government also plans to modernise the Port of Belize City Limited to turn it into a major port of call for cruise ships and container vessels. A land port project called Magical Belize exists, but its status remains uncertain. In addition, these projects have already encountered a number of legal obstacles and delays and, due to their direct competition, not all of them are likely to see the light of day.

The industrial sector (16%) should continue to be driven by increased electricity production. A USD 58 million project in partnership with the World Bank and the Canadian government was announced in February 2025, which should improve the country's capacity to manage its electricity supply and increase the share of renewable energies in its energy mix from 2026. Despite a disappointing season for sugar, agricultural sector production (11%) grew in 2024. It will remain heavily dependent on weather conditions in 2025, but the latter are looking more favorable. Nevertheless, the sector will be affected by a new fungal disease affecting sugar cane and the resurgence of the vis worm, which is threatening the emerging livestock industry.

Inflationary pressures are expected to ease further, thanks to fuel price declines outpacing increases in food and housing costs, and the exchange rate peg to the US dollar. In early 2025, the Prime Minister committed to introducing measures to curb rising living costs, which will also support private consumption.

Exports and international financing impacted by the US context

The review of the budget for fiscal year 2025-2026 (which theoretically begins on 1 April) has been postponed until mid-May 2025 due to disruptions caused by the March 2025 elections. Budget consolidation remains the priority, but with a more ambitious budget, buoyed by the success of the previous fiscal year. On the revenue side, USD 1.74 billion is forecast, which is an increase of around 6%. This will be achieved through continued economic growth, tax collection efforts and a broadening of the tax base. The budget will remain burdened by significant recurrent expenditures, notably civil service salaries (56% of total expenditures). Nevertheless, the share allocated to capital investment will increase the most in order to finance government projects, particularly road projects and the continued expansion of the national health insurance scheme. Part of the investment is to be financed by international aid. A project linked to the “blue economy” (waste management, sanitation, sustainable fishing and carbon markets) was approved in January 2025, totalling USD 32 million, in collaboration with the World Bank. However, the government will also need to compensate for the withdrawal of US development aid, which is expected to affect 40 active projects, including 16 critical projects, according to the Minister of Education and Foreign Affairs, as well as the cancellation of the USD 125 million grant awarded by the Millennium Challenge Corporation (MCC) in July 2024.

With the restructuring of the “super bond” into a “blue bond” in 2021 and the USD 300 million debt reduction agreement signed with Venezuela in 2023, the country's debt has been significantly reduced. Budgetary discipline should enable this momentum to continue. However, higher interest rates on “blue loans” are a burden.

Since the beginning of 2025, the balance of goods deficit has narrowed slightly, thanks to both lower imports of equipment and fuel and higher exports of agricultural products (oranges) and fish. Sugar exports are also expected to be strong: the UK authorities have renewed the duty exemption, and the sector is trying to strengthen its presence in the Caribbean Community market (CARICOM). However, performance could suffer from US tariffs, which threaten nearly USD 45 million in exports (sugar, pepper sauce, rum and wood). Similarly, the services surplus, which was expected to increase thanks to the boom in tourism revenues, could moderate if US household discretionary spending declines in the second half of the year. Furthermore, the repatriation of profits by foreign companies will be offset by higher remittances from expatriates. The deficit will be financed mainly by foreign direct investment.

Reaffirmation of the government's legitimacy will facilitate reforms

The victory of the People's United Party (PUP) in the 2020 elections ended twelve years of rule by the United Democratic Party (UDP) and brought its leader, John Briceño, to power. The next elections were scheduled for late 2025 but, acting on the request of the Prime Minister, the Governor General dissolved the National Assembly on 11 February 2025, prompting a call for a snap election. A month later, John Briceño was re-elected Prime Minister, with his party increasing its lead by winning 26 of the 31 seats. The snap election reinforced the government's legitimacy and capitalised on faction fighting in the UDP. With his majority reaffirmed, John Briceño should be able to implement his institutional and fiscal reforms, particularly those outlined in Plan Belize 2.0, as well as crack down on crime related to large-scale drug trafficking. However, budgetary austerity and insecurity will continue to fuel popular discontent.

The country will maintain its relations with Mexico and other Central American countries. To counter US policy, Belize wants to boost regional economic cooperation through the CARICOM Single Market and Economy (CSME). In 2025, the International Court of Justice (ICJ) could settle the two-century-old territorial dispute with Guatemala. The latter claims nearly half of Belize's territory, and the two countries decided to refer the matter to the Court in 2018. In 2022, Belize also referred a dispute with Honduras over sovereignty over the Sapodilla Cayes to the ICJ, and Guatemala requested its involvement as an interested party. Despite regional and international pressure, the country will continue to recognise Taiwan as a sovereign and independent nation, as well as their bilateral economic cooperation agreement, which includes infrastructure projects, financial and technical assistance, and a preferential regime for Belizean exports. At the same time, the UK's support will focus on tackling drug trafficking and money laundering.

Last updated: May 2025