Country Report Belize October 1996 Main report

Summary--Belize 4th quarter 1996.

Regional outlook for 1997-98: Friction remains between the Caribbean and the USA on a number of issues. Little substantive progress has been made with respect to regional economic integration. Economic growth prospects are modest, although new international loans may help to boost small-scale enterprise in the region.

Regional review: Several regional accords have been reached, including the establishment of a Caribbean Investment Fund and working groups for the negotiation of regional policy on major economic issues. Counter-narcotics agreements have been signed by a number of the region's countries with the USA. Sugar import quotas for the region have risen. Hurricanes have damaged several islands.

Outlook for 1997-98: A depressed economy will push the government in the direction of more expansionary policies. Falling export prices and a growth in consumer demand will place pressure on the current account.

Review: The opposition has halted a process of voter enumeration. Guatemala appears willing to reopen negotiations on the border dispute. Government borrowing has fallen as a result of the new 15% VAT, but the tax is likely to push up inflation and force greater numbers of Belizeans to cross the Mexican border for their purchases. Important new loan finance has been secured.

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