At his press conference on Friday, the Prime Minister also announced the country's ballooning debt to GDP ratio. The debt-to-GDP ratio is a metric which compares a country's public debt to its gross domestic product, basically a comparison of what a country owes with what it produces. This is a strong indicator of a country's ability to pay back its debts - which, ideally, should not exceed 70 to 80%.
Well, Belize's GDP is down 23% in the second quarter, and will probably be down 30% for the year. That decreasing GDP will push our ratio to around 125%. A very unhealthy number. On Friday, the PM said all those numbers are out the door in the COVID-era:
Rt. Hon. Dean Barrow
"Jules earlier asked about the debt to GDP ratio. Well, you go and you look at any of the international writing on this issue, nobody's worried about that! Nobody is worried about that."
"At the end of the day because of the global downturn, the usual metrics have gone out the window and it is conceded - take the particular case of Belize - that once things start getting back to normal, the Superbond in my view will have to be restructured, and that's going to deal to a large extent with our commercial debt problem."
"The IFI's, the very monies that they're lending us now, there is already a growing call for those IDFI's to engage in debt forgiveness for small countries such as Belize. So, in a context where the entire plane has to come together. And where those that control the levers of financing and borrowing and lending have a clear obligation that's being underlined time and again that every international forum with every international speech that your can view or listen to, there is going to be a way of getting the kind of relief from what in normal terms would be an astronomical debt to GDP ratio, there is going to be a way, there are going to be several ways of dealign with this such that in the - not necessarily in the short term - but at least in the immediate term, this country is going to bounce back and is once again going to be on a firm growth trajectory."
We note that the GDP was down only 23% in the second quarter when tourism - which supposedly accounts for 40% of GDP - completely flatlined.
