5.3% growth for 2012 best of Barrow’s 5 preceding budgets; better than Latin America and Caribbean average

Despite plummeting petroleum production and earnings, Belize’s Gross Domestic Product (GDP)—the value of all the goods and services produced in the country for the year—is approaching $3.2 billion, up from the $2.9 billion reported for 2011, according to Prime Minister and Minister of Finance Dean Barrow, reading his 6th budget in Parliament today.

“Preliminary estimates compiled by the Statistical Institute of Belize indicate that our economy grew by 5.3% during 2012, well above the 1.9% recorded for 2011 and just about the best in the Anglophone Caribbean,” Barrow said at the presentation of the proposed 2013 budget.

“Contrast that to the best in the Caribbean, which is Guyana, at 3%,” Barrow added.

He explained that “brisk activity in agriculture, agro-manufacturing, tourism, construction and telecommunications, which more than compensated for the sharp downturn in petroleum extraction, domestic electricity generation and cruise-ship disembarkations,” accounted for the sharp increase in the country’s GDP.

Barrow said that according the Central Bank Belize, “…this growth is notably above the entire Latin American and Caribbean Region’s estimated average of 3.0%.”

Looking ahead to the economic performance for 2013, Barrow cited projected GDP growth to decelerate to about 3.0% in 2013.

Those sectors which boosted economic growth in 2012 will have less of an impact in 2013, he said.

This growth, however, assumes that the gradual upturn in global growth to 3.5% will continue, especially through tourism, to support retail trade, hotels and restaurants, and transport and communication.

He added that, “The projection is also premised on the assumption that overnight tourism expansion will settle at 4.5% due to continued fragility and weak employment in Belize’s primary market, the United States.”

He cautioned, however, that “citrus may be facing headwinds from lower international prices and a cyclical crop downturn.”

Sugarcane, on the other hand, should benefit from technological and knowledge-based transfers from American Sugar Refining, which acquired the Belize Sugar Industries, Belize’s sole commercial sugar exporter, in 2012.

Overall, 2012 was a sweet year for sugar: Barrow reported that “…sugar production for the 2011/2012 crop year exceeded the 100,000 long ton mark for the first time since the 2005/2006 crop; and the average price paid to farmers was adjusted upward from $68.12 to $72.12 per long ton of sugarcane.”

The year 2012 also saw a 22.6% increase in sugarcane deliveries; a production hike of citrus juices and sugar at 12.8% and 15.4%, respectively; and growth of 10.2% in arrivals of overnight tourists, with visitors from the US and Canada, Belize’s primary markets, up by 14.8% and 29.2% respectively.

However, petroleum performance was disappointing: Barrow said that “…four additional wells at the Spanish Lookout field could not stabilize slipping oil production, and output fell by 26.8% to 1,029,938 barrels, significantly steeper than the 10.0% annual average decline that had been projected.”

Although cruise ship disembarkations fell by 11.9% to 576,661 visitors in 2012, due to fewer port calls, there is hope for the sector, as Barrow announced that at least one new cruise terminal with landside berthing facilities will start construction this year.

Price pressures have remained moderate, said Barrow, with the 2012 Consumer Price Index (CPI) rising by an annual average of 1.3% compared to the 1.5% increase in the previous year. Inflation pressures are expected to be up for 2013, though.

“The projected rise in the Consumer Price Index remains a moderate 2.5% for 2013,” Barrow said.