Belize’s debt-to-GDP ratio, which at the height of the pandemic-induced recession hovered over 130 percent, may have fallen to 89 percent due to a revised method for calculating economic activity.

The debt-to-GDP ratio is a workhorse statistic that looks at a country’s total government debt—both domestic and external—as a percentage of its total economic activity as measured by gross domestic product (GDP).

The Statistical Institute of Belize (SIB), as announced last Wednesday, has updated the methodology for calculating the country’s gross domestic product (GDP), thereby, pushing up this statistic by almost 30%, essentially increasing the denominator for the ratio.

For 2019, just prior to the pandemic, the revised GDP is placed at $4.742 billion, a figure that is up 22% from the original estimate of $3.89 billion. For 2020, the increase is by 27%, whereby the new figure is recorded at $4.039 billion, up from $3.171 billion.

For 2021, the SIB reported an estimated output of $4.470 billion, a 24 percent upward revision from the IMF’s $3.593 billion.

The larger denominator ultimately serves to push down the well-known debt ratio by an average of 20 percent.

Therefore, the ratio for the last three years (2019 to 2021) is revised downward to 79 percent, 104 percent, and 89 percent, respectively. This is down from the original statistics of 96 percent, 133 percent, and 111 percent, respectively.

The benchmark for the debt ratio is 60 percent of GDP; therefore, the revised methodology moves Belize’s fiscal position (at least statistically speaking) closer to that key target.