S&P: Belize outlook negative

Standard & Poor's said it revised its outlooks on its B+ long-term foreign and BB- long-term local currency sovereign credit ratings on Belize to negative from stable.

According to S&P credit analyst Olga Kalinina, the change in outlooks reflects the increasing challenges in tightening the government's fiscal stance, coupled with mounting external liquidity pressures.

"On the fiscal front, results may fall short of the original projection of a 0.9% general government deficit (including a social security surplus of 0.7%) in fiscal year 2004-2005, due to delays in levying a new one-time land tax and in eliminating some tax exemptions," Kalinina said. "Past high deficits have led to a rapidly rising debt level. Public-sector debt will increase to an estimated 98% of GDP at year-end 2004, up from 75% of GDP at year-end 2000."

On the external side, the country's growing financing needs (defined as current account deficit, medium- and long-term amortizations, and short-term debt) are estimated to total 436% of reserves in 2004, up from 326% in 2003.

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