Contagious Effect in Central America

Due to the crisis affecting Nicaragua and paralysis of construction in Panama between April and May, the IMF has reduced the expectation of economic growth for the Central American region from 4% to 3.3%.

Tuesday, July 24, 2018

The International Monetary Fund (IMF) cut growth forecasts for the Central American economy, due to the uncertainty caused by the situation in Nicaragua and its effect on the region's economic activity, and the impact of the construction strike in Panama, which has halted works on 260 projects nationwide for the last 30 days.

In a report on the outlook for the Latin American economy this year, the IMF said that "...In Central America and the Dominican Republic, the robust growth of the United States and the higher level of remittances linked to uncertainty about its future migration policies continue to support solid growth performance in 2018. In any case, the political uncertainty in Nicaragua and the temporary interruptions of the construction sector in Panama have weakened domestic demand, which has led to a slight downward correction of regional growth in 2018, which could be 4%."

The positive aspect of this analysis, according to the IMF report, is that the solid growth of the United States and the stability of remittances flows could help to partly counteract the impact of the Nicaraguan crisis, which could continue for several more months.

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IMF: Nicaraguan Economy to Grow 1.8% in 2010

April 2010

The International Monetary Fund expects Nicaragua to grow 1.8% in 2010, well below the 2.7% forecast for the rest of Central America.

According to the Fund, in 2011 Nicaragua would also grow at a lower rate than its Central American neighbors: 2.5% vs 3.7%.

Nicaragua’s economic recovery, heavily based on its agricultural sector, would also fall below the Latin American average, estimated at 4% for 2010 and 2011.

Regional Integration, the key to facing the crisis

November 2008

The International Monetary Fund urged Central America to unite to deal with the crisis.

IMF representatives present their report, "Central America: economy, progress and reforms," in Washington D.C. on Thursday, in a dialogue in which experts analyze the impact of the global economic crisis on the Isthmus' financial systems.

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