Photo: Kareem Michael, Governor of the Central Bank of Belize, presenting
by Kristen Ku
BELIZE CITY, Wed. Sept. 6, 2023
Today, September 6, in Belize City, the Central Bank of Belize held an inaugural press briefing as part of an expanded communication strategy aimed at offering in-depth insights to the Belizean public on key economic and central banking topics.
Governor of the Central Bank of Belize, Kareem Michael stated at the briefing, “This is the first of what I hope to be several more press briefings with the goal of increasing public awareness.”
He further highlighted that, while a financial literacy program had been predominantly spearheaded by the Central Bank with support from other governmental bodies, the element of engaging more directly with the public and media had not yet been fully realized.
The briefing thus represents a strategic move to integrate this key element into the bank’s literacy and communication efforts.
The bank’s overall objectives revolve around ensuring monetary and financial stability for Belize’s prosperity, grounded in oversight and objectivity. In his report, Michael delved into four pivotal areas:
1. Monetary Stability: Key to this is safeguarding Belize’s currency value. With an average inflation rate of 1.8% over the past three decades, Belize has seen only two peak inflations: 6.4% in 2008 due to geopolitical tension, and 6.3% in 2022 due to the global financial crisis.
Belize boasts the best inflation performance in the Caribbean. Maintaining this requires a balanced management of monetary inflows and outflows throughout the year. This is a collective endeavor, with tools like foreign exchange permit applications and monetary policies playing a crucial role.
2. Financial Stability: Prioritizing the prevention of banking crises is essential as they pose a risk to everyday savings.
The Central Bank supervises 85 financial institutions, accounting for about 8% of GDP and amassing assets of approximately $6.6B. Of these, three major institutions (all three of which are commercial banks) are deemed too significant to fail, and any disruption in their operations could be transmitted across the financial system.
3. Payment and Settlement: While 2017 saw the introduction of the APS3 automated payment settlement, a significant investment is now being made in a more digitalized payment system.
Over the past five years, there has been a noticeable increase in online transactions, exceeding 30 billion Belize dollars in value. The Central Bank remains committed to this digital transformation, though ensuring public trust in cash currency remains a priority, as evident in their recent currency upgrades.
4. Macroeconomic Outlook: Belize’s GDP growth rate is predicted to average at 3.55% in the medium term, a 1.3% increase from its historical rate. Factors like tourism growth will significantly benefit related sectors. Meanwhile, the Gross Official Reserves are projected to rise by 9.2% in the medium term, bolstered by sugar receipts and external loan distributions.
