Economy: Predictions Reserved for the Region

The outlook for some economies in the region for 2019 is not the best: in Nicaragua GDP is expected to fall between 5% and 7%, while in Costa Rica the growth estimate at the end of the year was reduced from 3.2% to 2.2%.

Tuesday, July 23, 2019

The estimates of the Nicaraguan Foundation for Economic and Social Development (Funides), presented in its "Informe de Coyuntura - Julio 2019", indicate that by 2019 an economic contraction of between 5.4% and 6.8% will be reported in the country.

The projection is based on a 6.6% contraction in private consumption, an 11.7% reduction in public spending and on the fact that fixed private investment could fall by 20%.

Nicaraguan exports and imports will also report at the end of the year a decline according to the study, in this case the year-on-year decline would be 8% and 15%, respectively. See Funides report.

The Costa Rican economy is another of the Central American economies that does not go through its best time, since in recent months the slowdown in the pace of activity has deepened.

You may be interested in "Economic Activity Does Not Rebound

The latest report of the Central Bank of Costa Rica (BCCR) details that in May 2019 the Monthly Index of Economic Activity reported in May a 1.3% year-on-year increase, one of the lowest growth rates reported in recent years, as a similar variation was not recorded since November 2013.

In this context, the BCCR reviewed the Macroeconomic Program and decided to adjust the economic growth projection for 2019 to 2.2%, with a moderate recovery to 2.6% by 2020.

The lower estimated growth is mainly the result of a poorer international economic performance, adverse climatic shocks, the fall in the price of important agricultural products for export, low levels of confidence among local consumers and investors, and the under-execution of public works, argued the BCCR. See Central Bank report.

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More on this topic

Economic Growth: Year-End Forecasts

October 2020

According to IMF forecasts, Panama and El Salvador are the economies that in 2020 will report the worst falls in their production, while Guatemala would be the country in the region that would emerge best from this economic and health crisis.

Due to the severe economic crisis generated by the covid-19 outbreak, the economic growth projections calculated by international organizations are not at all encouraging for Central America.

Economy: Slight Improvement in Central America

October 2019

After the economies of the region grew by 2.6% in 2018 as a whole, the IMF estimates that 2019 would close with a rise of 2.7% and could reach 3.4% by 2020.

The document "World Economic Outlook", prepared by the International Monetary Fund (IMF), states that for Panama the projected growth of the Gross Domestic Product (GDP) for 2019 was reduced from 5% to 4.3%.

Economic Growth Expectations Downwards

July 2019

For the Central Bank of Costa Rica, the projection of growth in production, which for this year is 3.2%, should be reviewed downward, because of the evolution that has shown the economic activity during the first half.

Considering the shocks that have affected national production so far in 2019, it is likely that this year economic growth will be below the 3.2% projected in the 2019-2020 Macroeconomic Program last January, explains the most recent report of the Central Bank of Costa Rica (BCCR).

Economic recession caused by the crisis

October 2018

New World Bank projections estimate that because of Nicaragua's political crisis, the country's GDP will fall 4% this year and 1% in 2019.

According to the expectations of the international organization, Nicaragua will be the only economy that will decrease in Central America, because of the political and social crisis in which the country is involved since last April, it is expected that the Gross Domestic Product (GDP) will decrease 3.8% in 2018 compared to 2017.

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