Standard and Poor’s Rating Services has published a revision of its outlook on the long term ratings on Belize. According to this revision, dated November 25, 2015, Belize’s outlook has gone from being positive to being stable with an affirmation of the B-Minus/B Rating on the country’s foreign and local currency sovereign credit.
According to the report, the rationale behind this revision is based on the country’s weaker fiscal and external positions that increase its vulnerability to external shocks. The report says that Belize’s fiscal outlook has deteriorated and it is expected that the change in Belize’s debt figure will substantially exceed the initial target which was five point one percent of GDP for the fiscal year ending March 2016.
The increase is being attributed to higher spending particularly with the thirteen percent public sector wage hike, the pre-election spending and the compensation owed to Fortis and Ashcroft Alliance. With these payments in mind, Standard & Poor’s Rating Service projects that the general government deficit will reach eleven point two percent of GDP in fiscal 2015/2016 from the three point nine percent of GDP that it was in 2014/2015.
In an interview with Prime Minister Dean Barrow, over the weekend, he did allude to the tightening of government spending, which he says is the rationale behind the streamlining of the annual Christmas Cheer program.