Belize economy records downturn; trade sinks to 5-year low
Latest information from the Statistical Institute of Belize (SIB) <http://www.statisticsbelize.org.bz/shownews.asp?newsid=63
> indicates that for the 1st quarter of 2009, the Belizean economy contracted by 2.2% in real terms when compared with the same period of 2008. The Belize economy has not seen a downturn since the last two quarters of 2007.
Tourism, trade, agriculture, all showed very weak performances, while financial services and private business, and construction and manufacturing helped to offset losses in those sectors.
“The decline was underpinned by a slowdown in trade, which was evident in a 15.1 percent reduction in merchandise imports,” the SIB release said.
According to the official SIB data, the sector hardest hit in the ongoing economic storm in the first quarter of 2009 was wholesale and retail trade, which contracted by 14% — the worst on record since 2002. In dollar terms, trade figures are the lowest they’ve been since March 2004.
Low crude exports and reduced market prices also factor into the GDP equation. SIB’s trade bulletin for January and February 2009 indicated that crude exports were down from $33.85 million in January and February 2008 to a mere $7.06 million for January to February 2009, with exports sliding from 7.72 million gallons to 5.26 million gallons, signaling that both the decreased price of crude oil and lower production have slashed the dollar earnings from crude exports. (The figures for March are not yet published.)
The figures furthermore indicate that Gross Domestic Product (GDP) for the first quarter of 2009 registered at $601.6 million, contrasting with $615 million for the same period in 2008. The GDP figure for the first quarter of 2009 is also worse than that recorded for 2007.
The sector that performed the best was “private business and financial services,” which the SIB reports as having grown by 10.4 % — its best performance since the same quarter in 2003.
As we reported in the Amandala last week, the tourism sector is complaining that it has been hurting, particularly on account of the global financial crisis.
The SIB confirmed this in its recent report, and it furthermore indicated how that has had a domino effect on other areas of the services sector.
It explained that, “Weighed down by the weakness in tourism, which is attributable to the global financial crisis, the service-producing industries (hotels and restaurants) contracted by 10.7 percent, much worse than the previous quarter’s contraction of 1.3 percent. Stay-over tourist arrivals slumped by 11.0 percent while cruise ship arrivals also fell by 1.9 percent.”
The news from the agricultural sector, and particularly the banana industry, was also not good:
“The agriculture sector fell by 6.8 percent, largely as the result of a 17.6 percent decline in banana production,” said the SIB report, while explaining that, “The slowdown in banana production falls within expectations and was mainly due to a downward correction from the 2008 first quarter surge that was a result of an EU replanting project and the recovery from diseases in late 2007.”
On the upside, the SIB reports that, “The construction and manufacturing sectors also provided a small boost to the economy, reporting increases of 6.2 percent and 5.5 percent, respectively.”
The Government of Belize reports that in 2008, the Belize economy grew by 2.8%, and its projections are looking optimistically for continued growth in the region of 2.5% to 3.0% for 2009.
However, the annual International Monetary Fund (IMF) report on Belize projects that the Belize economy may grow a mere 1% for 2009, which we note is in line with the projections for the wider Caribbean region. Still, Belize and the rest of the Caribbean are forecasted to do better than many of the more developed countries and also the Latin American states.
Information Amandala accessed today from the World Economic Situation and Prospects 2009/2010 <http://www.scribd.com/doc/15591226/World-Economic-Situation-and-Prospects-20092010
> [updated as of mid-2009* – the complete 2009 version can be found at http://www.un.org/esa/policy/wess/wesp2009files/wesp2009.pdf
–188 pages], says that, “The world economy is expected to shrink by 2.6 percent in 2009 after an expansion of 2.1 percent in 2008 and nearly 4 percent per year during 2004-2007.
“While a mild recovery is expected in 2010, risks remain on the downside. Developing countries are disproportionately hard hit by the crisis.”
The US Commerce Department reports that the US economy contracted by 5.7% in the first quarter, while Statistics Canada reports that the Canadians were hit with a 5.4% contraction for the same period.
The story is much the same as it is for Belize, with contracting trade numbers and declining trade activities being among the factors of greatest concern.
The prediction for the US economy, according to the UN report, is for a 3.5 percent contraction in 2009 and a meager 1% recovery in 2010.
“The economies of Australia, Canada and New Zealand are also expected to shrink in 2009, suffering from falling global demand and commodity prices,” the UN report added.
It also forecasts gloom for Mexico and Central America “given their strong dependence on manufactured exports to and workers’ remittances from the United States.”
Looking to our region, the UN report says, “The Caribbean will see a mild growth in 2009, reflecting relatively strong economic performance in Cuba, expected from the easing of US restrictions on Cuba’s economy.
“Unemployment is expected to rise significantly throughout the region in 2009, reversing the trend of formal sector job growth in the past five years.”
* This report is a joint product of the Department of Economic and Social Affairs (DESA), the United Nations Conference on Trade and Development (UNCTAD) and the five United Nations regional commissions (Economic Commission for Africa (ECA), Economic Commission for Europe (ECE), Economic Commission for Latin America and the Caribbean (ECLAC), Economic and Social Commission for Asia and the Pacific (ESCAP), and Economic and Social Commission for Western Asia (ESCWA)). It provides an overview of recent global economic performance and short-term prospects for the world economy and of some key global economic policy and development issues. One of its purposes is to serve as a point of reference for discussions on economic, social and related issues taking place in various United Nations entities in 2009.
Adele Ramos for Amandala