By Ziad Amer, Bunyada Laoprapassorn, and Shane Lowe
Blessed by nature with lush forests, coral reefs and a strategic location near Mexico and the United States, Belize’s economy is highly reliant on tourism, which directly contributes about 12 percent of gross domestic product (GDP). But infrastructure bottlenecks restrict the future growth of the tourism industry. To unlock its full potential, Belize seeks to boost investment in infrastructure to address tourism capacity constraints, expand financing to the private sector, and create more opportunities for its labor force.
In 2024, Belize received over half a million “stayover” tourists (those who stay in hotels, as opposed to cruise ships visitors), growing by 18 percent relative to 2023 and outpacing many more famous Caribbean destinations. However, three-quarters of these visitors arrived in the country’s only international airport in Belize City, which has hotel capacity for only about a fifth of them. Although overall the country has enough room capacity, according to our estimates, the distribution does not align with its most popular touristic sites, some of which require long drives or boat rides that create additional bottlenecks.
Other operational and infrastructure constraints also exist. Our analysis shows that flights to Belize are already close to capacity (compared to other countries in the region), suggesting that a future surge in stayover visitors (like last year’s) could run into issues like airport terminal capacity limits or airlines’ ability to quickly add more flights.
The country is trying to address these issues with diversification and infrastructure investment. Examples include eliminating border fees for short-stay Mexican visitors; the planned developments of a new airport in the resort island of San Pedro and a potential international airport in Placencia in the south; the modernisation of the Port of Belize; and the Tren Maya, which would connect Mexico and Guatemala through Belize, enhancing regional mobility and expanding tourism capacity.
Expanding access to finance
Luckily for Belize, its banks have the capacity to support this expansion, holding ample liquidity and capital. However, since access to financing is still challenging for many businesses, the government and the central bank took several initiatives to increase the formalisation of firms and to expand the range of assets they can use as guarantees for loans.
Dwindling active labor force
Expanding access to finance can also create more opportunities for women to participate in the labor force, which is critical for future growth. Belize’s population is growing more slowly, and the labor force participation has declined, from 65 percent of the working age population before the pandemic to 57 percent in 2024. The situation is particularly concerning among women, as only just about half of them are in the work force, compared to three quarters of the male working age population. This gap is one of the highest in the Caribbean.
Our estimates suggest that fully closing this gap could boost GDP by over 20 percent in the long run. But achieving that will require additional actions from the government, including raising educational levels and reducing salary disparities and higher unemployment among women. Improving access to affordable, high-quality childcare would reduce the economic and logistical barriers, enabling more women to join and remain in the workforce.
The government is expanding access to childcare and training programs, along with initiatives to promote entrepreneurship and foster job placement. Supporting greater female labor force participation will be critical for boosting Belize’s growth potential.
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- Ziad Amer, Bunyada Laoprapassorn, and Shane Lowe are economists in the IMF’s Western Hemisphere Department
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