Economic Recovery: Far Away On The Horizon

Because of the fall in economic activity and the restrictions imposed to contain the spread of covid-19, businessmen in Costa Rica and Panama predict that the process of economic recovery will not be completed in the near future.

Wednesday, January 13, 2021

In this crisis scenario generated by the covid-19 outbreak, the Costa Rican economy does not show clear signs of recovery, since during November 2020 the Monthly Index of Economic Activity reported a year-on-year fall of 6.2%, a decline similar to that reported in October, when it was 6.3%.

Check out the "System for monitoring the markets and economic situation in the countries of Central America", developed by CentralAmericaData.

Although the 6% drop reported in November is considerably less than the 11% drop registered in May 2020, businessmen believe that the levels of economic activity are still low.

Jairo Mena, economic advisor of the Costa Rican Chamber of Commerce, told that "... the figures are still very low, and the indicators are still far from reaching pre-pandemic values, even though before the crisis by the covid-19 already showed worrying indicators."

See "Economic Recovery: Costa Rica Stagnates"

According to Mena, the recovery process is going at a slow rhythm, as the 7% drop shows that it is far from reaching the levels reported in the first two months of 2020.

Panama is another of the economies in the region that has not managed to consolidate an economic recovery. In this case, the restrictions imposed by the government at the end of 2020 and in the first days of 2021, and the application in those of a gradual reopening process, generate uncertainty among business leaders.

Also see "Economic Reopening: Plans in Panama"

Domingo De Obaldia, a member of the Association of Restaurants and Related Industries, told that the closures decreed by the government for December and January were a mortal blow to the country's restaurants.

Regarding the restrictions on the mobility of people and their impact on the sector, De Obaldia explained that "... Not everyone can live from delivery, you can't extrapolate the activity, everything takes time. In this part of the story, to depend on delivery again when the Panamanian's pocket is so beaten, is even more difficult."

According to the process of "gradual and asymmetric reopening", in Panama as of February 15 restaurants will be able to start serving their customers in the table areas.

See's article "Entrepreneurs: 'We are far from an economic recovery'" and's article "Skepticism about the plan to gradually reopen the economy".

More on this topic

Costa Rican Economy Remains in Crisis

April 2021

During February 2021, economic activity fell 4.7% in year-on-year terms, a drop that evidences that the economic crisis caused by the covid-19 outbreak continues to affect Costa Rica.

According to the Central Bank of Costa Rica (BCCR), as per the cycle trend series of the Monthly Index of Economic Activity (IMAE), the inter-annual variation of production reached its lowest point in June 2020, at which point it began a gradual recovery process.

One Year of Crisis: How are Economies Recovering?

March 2021

Twelve months after Central America began a health and economic crisis triggered by the covid-19 outbreak, Guatemala was the fastest recovering economy and Panamanian economic activity is the slowest to return to pre-pandemic levels.

In March 2020, the first cases of covid-19 began to be detected in the countries of the region.

Costa Rican Economy Slowly Recovers

November 2020

After the IMAE reported year-on-year variations of -9% and -8%, respectively, in July and August, during September the Costa Rican economy continued to recover from the impact of the health crisis by reporting a 6% drop in production.

The Central Bank of Costa Rica (BCCR) reported that the economy is in the process of recovery, as a result of the process of reopening and gradual lifting of sanitary restrictions, which were imposed following the outbreak of covid-19. However, the upturn so far is not enough to fully recover the loss in production of the previous quarter, so the level of activity is still lower than in the last quarter of 2019.

Guatemalan Economy Recovers Quickly

November 2020

After dropping in May 2020 due to the outbreak of covid-19, then registering a -11% year-on-year variation, since then the economic activity index has been recovering quickly, reporting a reduction of only 0.3% in September.

The 0.3% decline in the Monthly Index of Economic Activity (IMAE) was influenced by the drop recorded in Accommodation and food service activities, Construction, Trade and vehicle repair, Transportation and storage, as well as by the growth observed in Manufacturing industries; Supply of electricity, water and sanitation services, and, Agriculture, livestock, forestry and fishing.