Belize

Resilient growth despite epiphytes affecting the agricultural sector

Growth is expected to accelerate modestly in 2026, driven by dynamic private consumption and higher investment. Benefiting from consumption by both residents and visitors, services (62% of GDP, 3.2% growth over the first three quarters of 2025) will be the main engine of growth. Tourism (13% of GDP) is expected to pick up again after its disappointing performance in 2025 (a 1.6% yearonyear decline in overnight foreign visitors) despite the surge in cruise passenger arrivals (up 8.5% yearonyear). Cruises accounted for 63% of tourist entries in 2025 but generate lower revenues than overnight stays. Tourism will remain vulnerable to aviation fuel prices, which are under pressure due to the war in Iran. It is also closely correlated with the US business cycle (US tourists represent 70% of arrivals). The country’s tourism potential, which is highly price competitive, continues to be underexploited compared with the rest of Central America due to a lack of accommodation infrastructure. On the investment front, the government confirmed in March 2026 the launch of the project to expand Belize Port (Belize City), both for commercial freight and cruise ship docking, a project that had been delayed for several years. It foresees an investment of USD 450 million. Several private cruise port projects are also under development.

After a sharp decline in the first half of 2025, agriculture and fishing (8% of GDP) picked up again at the end of 2025 and will show moderate growth in 2026. Sugarcane production fell significantly in 2024-2025 (down 8.9% yearonyear) and will remain affected by the fusarium blight, which is also weighing on sugar and molasses output. Citrus production is likewise suffering from huanglongbing (yellow dragon disease), which will heavily impact the 2025-2026 harvest (down 17% yearonyear in the last quarter of 2025). Barring a major climatic shock, these difficulties will be offset by banana production and fishing, which are expected to post sustained growth. The secondary sector (14% of GDP) should stabilise. Construction (notably in tourism and transport infrastructure) and energy will offset the challenges faced by the agrifood industry, particularly beverages (6% of GDP), which is closely linked to sugar production. The electricity sector will benefit from a USD 58 million project announced in February 2025, in partnership with the World Bank and the Canadian government, aimed at improving the country’s capacity to manage its power supply from 2026 onwards and increasing the share of renewables in the energy mix (43% in 2024). Electricity imports from Mexico will, however, continue to account for a large share of consumption (25% in 2024). In October 2025, the government purchased the assets of the Canadian group Fortis Inc in the hydroelectric sector (accounting for 30% of national consumption) as well as its 33% stake in the national electricity provider, Belize Electricity Limited (BEL). The three hydroelectric plants were subsequently reprivatised in December to institutional investors (including the Social Security Board) and Belizean retail investors. The operation generated a net gain for the public authorities of USD 19 million.

After having eased for several years, inflation will rise again in 2026 on back of higher fuel prices and increases in average electricity tariffs (up 7% yearonyear) and water tariffs (up 13.5%) obtained respectively by BEL and Belize Water Service Limited (BWSL) in January 2026. The Central Bank of Belize (CBB) will nonetheless keep its interbank rate unchanged at 2.25% (stable since 2021). The CBB does not rely on policy rates but instead uses reserve requirements as its main tool to influence domestic credit. Its primary mandate is to maintain the fixed peg of the Belize dollar to the US dollar, set at 2 BZD per 1 USD since 1976. This peg is not at risk as the CBB holds adequate international reserves (4.5 months of imports), which were rising at the end of 2025 (up 15% yearonyear). Maintaining the peg depends mainly on targeted interventions and foreignexchange controls. Despite a relatively high banking penetration rate (70% of the population), the Belizean banking system is narrow and domesticcurrency interest rates remain high (a weighted average rate of 8.48%). However, it should benefit from the country’s removal from the FATF grey list in January 2025, although it remains subject to regular monitoring.

Continued fiscal consolidation

The government presented its draft budget for fiscal year 2026–2027 in early March 2026, which was scheduled to enter into force on 1 April. Fiscal consolidation, which has been a priority in recent years, will ease tentatively. The primary balance (i.e., excluding interest payments) will remain in surplus but will fall by 19%. Expenditures (1.9 billion BZD, up 13% yearonyear) will be driven by a sharp increase in public investment (up 32%), mainly in electricity infrastructure, the modernisation of the Belize City–Belmopan highway, education and the health system. Salaries and pensions will nonetheless continue to account for 60% of total spending. Part of the investment will be financed by international assistance, which is expected to increase in 2026. The Millennium Challenge Corporation (MCC) grant programme of USD 125 million over five years that was signed in September 2024 and later questioned by the US administration, was confirmed in September 2025. Belize was also deemed eligible for the International Development Association (IDA) programme in 2024. In this context, it signed several financing agreements (grants and concessional loans) with the World Bank amounting to USD 77 million.

The country’s debt burden was significantly reduced after the restructuring of the super bond into a blue bond in 2021 in exchange for commitments to protect the coastline and the 300milliondollar debt reduction deal agreed with Venezuela in 2023. In 2025, however, it increased slightly due to slowing growth and a higher deficit. Debt reduction should resume in 2026, supported by a decline in debt service. Nevertheless, it will still account for around 12% of public spending in 2026. External debt represents 64% of total debt. In addition to the blue bond managed by the US environmental NGO The Nature Conservancy (USD 364 million), its main creditors are Venezuela (USD 214 million), Taiwan (USD 214 million), and the Caribbean Development Bank (USD 165 million). Repayment of the Venezuelan debt has been suspended since 2017, when the US imposed sanctions against PDVSA.

The current account deficit widened slightly in 2025 following the deterioration of the trade deficit (14% of GDP). Imports increased, driven by food products, textiles and fertilisers. At the same time, exports were hit by the drop in sugar production (down 37% for sugar and 60% for molasses, yearonyear), compounded by the decline in global prices. Banana exports, however, recorded solid growth (up 8%). The surplus in the services balance (12% of GDP) was unable to offset the widening trade deficit in amid stagnating tourism revenues, while remittances (1% of GDP in 2025) narrowed slightly on back of a tighter US migration policy. In 2026, the current account deficit is expected to stabilise thanks to a slight improvement in food exports (85% of the total). An increase in tourism revenues, which depend on the US economic outlook, could also contribute. The balance will nonetheless remain weighed down by higher fuel prices (10% of total imports) compared with 2025 and by rising prices for imported electricity. The current account deficit will be financed mainly by increasing foreign investment.

The large electoral victory of the governing party will facilitate reforms

The incumbent Prime Minister Johnny Briceño, who had been in power since 2020, was returned to office in the March 2025 legislative elections following a landslide victory by his party, the People’s United Party (PUP, left). The PUP won 26 of the 31 seats and retained its supermajority. The main opposition party, the United Democratic Party (UDP, right), was thwarted by internal divisions in an election marked by low turnout (64.8%, the lowest rate since independence). Bolstered by this renewed majority, it should be able to implement its institutional and fiscal reforms, notably under the Plan Belize 2.0, as well as its crackdown on crime linked to significant drug trafficking. In the context of an improved budgetary situation, education and health will be two government priorities. However, violence and crime will continue to fuel public dissatisfaction.

The country is striving to maintain good relations with Mexico and other Central American nations. Within the Caribbean Community (CARICOM), Belize a free movement agreement with Barbados, Dominica, and Saint Vincent and the Grenadines signed in October 2025. Furthermore, at the end of 2026 the International Court of Justice (ICJ) could issue its final ruling on the territorial dispute with Guatemala that has simmered for a century and a half. Guatemala City claimed nearly half the Belizean territory and both countries decided to refer the matter to the Court in 2018. In 2022, Belize also referred to the ICJ a dispute with Honduras regarding sovereignty over the Sapodilla Cayes. Guatemala requested to intervene as an interested party.

Outside the region, Belize is seeking to attract foreign investment, particularly from North America. Relations with the US will remain cordial. The two countries signed a safe third country protocol in October 2025 that could result in Belmopan hosting asylum seekers living in the US. Despite regional and international pressure, the country still recognises Taiwan as a sovereign and independent nation, with which it maintains a bilateral cooperation agreement covering infrastructure projects, financial and technical assistance, and preferential treatment for Belizean exports. At the same time, cooperation with the UK will continue the main focus being the fight against drug trafficking and money laundering, as well as organising military training. Exiting the Commonwealth and establishing a republic, which is a policy aim expressed by Mr. Briceño, is unlikely in the short term owing to overwhelming public sentiment against the move.

Last updated: March 2026