Caribbean business news highlights from Issue No. 8 of Market Dynamics Caribbean, our comprehensive research and analysis report, published every two weeks.

Doing business in Belize? Read on for our spotlight on Belize business news highlights.

Market Dynamics Highlights

  • Grenada, Jamaica and St. Kitts & Nevis, analysis of Budget Presentations
  • Belize’s government bond rating is upgraded by Moody’s from Ca to Caa2
  • Haiti sees Cabinet changes for the Economy & Finance and Communications portfolios
  • Jamaica announces that IMF management will submit a $958MM (SRD 615MM) arrangement to the Board
  • Puerto Rico’s Aqueduct & Sewer Authority (PRASA/AAA) bonds are downgraded by Fitch to BBB- from BBB
  • Saint-Martin (F) gets a new President of the Collectivité, Aline Hanson, after Alain Richardson was declared ineligible
  • Trinidad & Tobago’s Energy Ministry details the project development agreement signed for the US $850MM DME plant

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Spotlight on Belize

IMF Article IV Consultation on the Economy of Belize:

Context: Economic activity picked up in 2012, as the economy expanded +5.3%. Belize Business NewsThe result came in spite of falling oil production, and reflected a recovery from the 2011 drop in commodity exports due to climate impacts. Inflation averaged 1.4% last year. The current account deficit widened 0.6 point of GDP to 1.7% on falling the unfavorable oil trade dynamic. GDP is expected to grow 2.5% YoY in 2013.

Recommendations: The IMF calls for enhanced fiscal management and consolidation, reform of the Financial sector, and reducing vulnerabilities in the external sector. Spending restraint will be key to building sustainable fiscal policy, and mid-term debt management targets need to be set to face the increasing needs for financing going forward. Close monitoring of the Financial sector is required of the Central Bank, as non-performing loan levels remain high (despite a downward trend).

Belize will introduce a credit reporting system:

Belize announces the introduction of a credit reporting system, which will provide a platform for financial institutions to share information on credit. The system will be developed with assistance from the International Finance Corporation, and cooperation from the Canadian International Development Agency and the Central Bank.

Such a system can be expected to benefit both business and consumers, by reducing information asymmetries between borrowers and lenders, and leveling the playing field among lenders. Increased information will provide greater access to credit, and is expected to lead to reduced lending rates for customers with good credit scores. The financial system can also expect to benefit from access to more complete information on risk, which will allow them to strengthen the quality of their balance sheets.

The system is expected to pool information from financial institutions, insurance companies and utilities. Legislation is currently in draft form, with expectations to have a framework in place to begin licensing before year-end.

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