International Monetary Fund publishes working paper on growth constraints in small developing states using Belize as a case study

The International Monetary Fund published a working paper examining key constraints on sustained economic growth in small developing states, using Belize as the central case. The paper focuses on access to finance, labor force participation, and tourism sector capacity, and identifies factors that may be limiting private sector credit, participation in the workforce, and tourism expansion. On access to finance, the empirical analysis finds that both demand and supply factors constrain private sector credit, with key channels including lending rates, complex collateral processes, the legacy of high non-performing loans, and regulatory capital held above the regulatory minimum. For labor force participation, it assesses drivers of differences in participation gaps between men and women, highlighting the relevance of tourism’s share in services, youth educational attainment, disparities in labor market outcomes, and the availability of childcare. On tourism, the paper points to hotel capacity, flight availability, and cost competitiveness as critical determinants of the sector’s prospects, and notes that IMF working papers represent research in progress and do not necessarily reflect IMF views.