Anyone who's listened to Finance Minister Ralph Fonseca speak publicly will have heard the boast of a $2 billion Gross Domestic Product (GDP), meaning the sum total of all the country produces.
Sure enough, it's an impressive figure, particularly in a small economy - and that high has been realized through record growth, which averaged 7% over the last 4 years.
But as our GDP has grown so has debt, and now an alarming new study shows that debt has actually overtaken the GDP. That's right, according to Standard and Poor's - which assesses the credit worthiness of countries and large companies - Belize's national debt is 106% of GDP, which is almost double the internationally accepted standard of 60%. According to our math, that places the debt figure at an alarming $2.12 billion - almost a billion more than government has admitted to.
This information was posted a week ago on the Standard and Poor's website as part of its regular credit ratings review. According to the report, the debt figure has shot up from 75% of GDP in 2003. It also notes that, "Belize's public sector debt is one of the highest among sovereigns."
The report goes on to point to what are called a modest level of reserves representing only 1.3 months of imports which we'll note is far below the ideal three months and does not include that money which is committed to support external debt, nor the 40% of reserves which must be held to support of the monetary base. All that means that - if we go by the Standard and Poor's assessment, Belize hardly has cover for two weeks of imports. And that leads the Standard and Poor's analysts to state in the conclusion that "fiscal slippages could lead to a further increase in debt and undermine the peg to the U.S. dollar."
All in all it's a dire prognostication, but the good news and there is good news is that despite all this portent of doom, Standard and Poor's affirmed Belize's rating, an encouraging B+, bb, and b.
So what does all this mean? Well it means that GOB and Standard and Poor's must be reading form different books, because at the budget presentation in January, Fonseca said that the public debt was $1.34 billion, or 58% of GDP, safely below the accepted international standard of 60% of GDP.
You can see the report for yourself at Standards and Poor Website