Dark Economic Outlook

The World Bank projects that the Central American economy will contract by 3.6% this year, due to restrictions on movement, a decline in remittances and tourism, and a drop in agricultural prices.

Tuesday, June 9, 2020

The sudden and widespread impact of the coronavirus pandemic and the measures taken to contain it have caused a drastic contraction in the global economy, which, according to World Bank forecasts, will shrink by 5.2% this year, the bank reported on June 8.

The effects are being particularly severe in the countries most affected by the pandemic and those that depend heavily on international trade, tourism, commodity exports and external financing.

The report states that "... The risks facing the region's outlook are clearly unfavorable. A worsening of the outbreak would put pressure on health systems and be devastating for countries with limited health care capacity. Outbreaks of the virus in the region's large economies could have a spillover effect, and a second wave of the pandemic in advanced economies would have negative repercussions in the region."

See "Economic Growth: Outlook for the Region"

According to the projections published in June by the World Bank, the outlook is worse for some economies when compared to that predicted by the same organization in April, as El Salvador went from -4.3% to -5.4%. Nicaragua went from -4.3% to -6.3%, and Honduras from -2.3% to -5.8%.

In the case of Guatemala, the fall would almost double, since in April the forecast was that the economy would shrink by 1.8% in 2020 and in June the estimate changed to a decrease of 3%.

The forecasts for Costa Rica and Panama remained unchanged. See the comparative table of forecasts published by the World Bank.

Country
Outlook for 2020, published in April
Outlook for 2020, published in June
Costa Rica
-3,3%
-3,3%
El Salvador
-4,3%
-5,4%
Guatemala
-1,8%
-3,0%
Honduras
-2,3%
-5,8%
Nicaragua
-4,3%
-6,3%
Panamá
-2,0%
-2,0%


See "Regional Outlook" as of June 2020.



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