Moody’s Upgrades Belize Credit Rating to B3

Belize has received another positive signal on the strength of its economy, with Moody’s Ratings upgrading the country’s long-term credit rating from Caa1 to B3. The outlook remains stable.  Moody’s says the upgrade reflects the progress Belize has made in managing its finances, lowering public debt and building its foreign reserves. Since the 2021 debt restructuring, the Government has continued to spend less than it collects, before interest payments are counted. That primary surplus stood at about one-point-five percent of GDP for the last financial year.  The country also has some breathing room when it comes to debt payments. Major principal payments on the Blue Bond will not begin until 2032. That gives the Government more time to bring the debt down further, build its savings and prepare for those payments.  Belize’s foreign reserves have also grown. By July, the country had about 495 million US dollars in liquid reserves, enough to cover almost four months of imports. Tourism and continued foreign investment have helped with that increase.  Moody’s expects the Government to keep spending under control and continue reducing the public debt. That is why the agency has kept Belize’s outlook stable.  There are still some risks. Public debt remains high at about 70 percent of GDP, and the economy still depends heavily on tourism. A major hurricane, higher food and fuel prices or a drop in international travel could slow the progress being made.  Moody’s says Belize could receive another upgrade if the debt comes down faster and foreign reserves continue to grow. On the other hand, the rating could fall if government borrowing increases or the country’s reserves drop sharply.