BELMOPAN, Belize, CMC – Belize is seeking concessions from its private sector and international creditors to offset the impact of servicing its US $960 million debt, according to Prime Minister Said Musa.
“Servicing of the Belizean external public sector debt stock on its existing terms is no longer a viable option. We must urgently ask the cooperation of our creditors to help put this debt stock on a sustainable footing,” Musa said in a statement released by the Ministry of Finance Thursday.
The statement did not give details of the concessions the administration was seeking but said government expected most of its external commercial debts and public sector entities to be affected by the debt rearrangement which it was seeking to have implemented by the fourth quarter of 2006.
Musa, who is also finance minister, said since October 2004 government embarked on a policy aimed at tightening fiscal policy resulting in a major reduction in capital expenditure and expansion in government revenue and a reduction in its overall deficit from over eight per cent of Gross Domestic Product in 2004/05 to 3.1 per cent in 2005/06, but these measures were not enough to improve the country’s economic situation.
“Even with these belt tightening measures, however, Belize is projecting significant fiscal deficits, exacerbated by Belize’s very low level of international monetary reserves. Belize’s ratio of debt to GDP is just over 90 per cent. The country spends, on interest payment alone, more than 27 per cent of the government’s fiscal revenue,” he said.
The ministry said government had retained an independent team of financial advisers to immediately assist it in its consultations with the targetted creditors.