Economist Warns US/Israel War on Iran Could Force Budget Revisions

Prime Minister John Briceño presented the national budget for fiscal year 2026/2027 last week. However, the $1.9 billion budget might be facing growing uncertainty as global instability, including the US/Israel war on Iran, threatens to disrupt economic projections.

“Any projected figure mentioned by the Prime Minister has to be revised in light of the Iran war,” economist Dr. Phillip Castillo told News 5.

At the centre of the concern is the recent spike in fuel prices, now being felt at the pumps across Belize. Fuel taxes remain one of the government’s largest sources of revenue, creating a delicate balancing act for policymakers.

“There is so much that we want to do and the only way we can provide goods and services to our people is by collecting taxes,” Prime Minister Briceño said in a previous interview, pointing to expanded free education at government high schools as one example of increased public spending.

But Castillo warns that higher fuel prices, while boosting short-term tax intake, can hurt the broader economy.

“Fuel is by far one of the largest revenue sources to any government in Belize,” he explained. “When fuel prices go up, governments benefit because tax intake increases. But as those prices work their way through the economy, the broader macroeconomy is impacted.”

That impact could ripple across GDP growth, inflation, employment, and trade, especially for a small, import-dependent economy like Belize. With no clear end in sight to global tensions, economists like Dr Castillo caution that financial projections may soon need adjusting to reflect a far more volatile reality.