Guatemala's Economy is Cooling Off

The Central Bank has reduced the outlook for economic growth this year, arguing that there has been a slow recovery of the global economy and a slowdown in some sectors at the local level.

Friday, July 28, 2017

The Bank of Guatemala has reduced the expected growth rate for 2017 from a range of 3% to 3.4% to a range between 3% and 3.4%. At the local level it is estimated that one of the activities that will show reduced performance is construction, whose expected growth rate fell from 3.6% to 3.4%.

The president of the Bank of Guatemala, Sergio Recinos, explained to that "... in this downward revision several aspects were taken into consideration, in particular the deceleration - the slower rate of growth - of the world economy. 'Some countries will not show the expected behavior, meaning a slight impact will be felt which in turn will be reflected,' he said. On the domestic side, it is thought that some activities will perform positively and they have been revised upwards, but others will show lower than expected growth and have been adjusted downwards."

See "Economic Activity in Central America Up 3%"

"... The only economic activity that will show negative performance will be mines and quarries, which from an expected 11.4% has been extended to 17%. The sectors that will decelerate according to the evaluation are construction, which was altered from 3.6% to 3.4%. Public Administration, from 4% to 2.8% and Financial Intermediation, from 8.6% to 6.2%.  The first two activities will be influenced by a lower execution of public spending, especially in the first quarter, and the third by a deceleration in bank credit granted to the private sector."

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Economic Growth Forecast Downwards

August 2019

In Honduras, the Central Bank reduced the economic growth projection by the end of 2019 from 3.3% to 3.4%.

The main indicators of high-frequency economic conditions, such as the Monthly Economic Activity Index (IMAE), indicate a moderation in economic activity in relation to that observed in previous years, is one of the arguments of the Central Bank to review economic growth downwards.

Guatemala: Growth Projections Improve

February 2019

The behavior of credit to the private sector, public spending, imports and remittances would explain the higher growth expected for the economy this year.

The Bank of Guatemala (Banguat) reported that this year's economic growth is projected to range between 3% and 3.8%, with a central value of 3.4%, up from the 3.1% reported during 2018.

Nicaragua: Economy to Grow 4.7% in 2018

December 2017

Funides projects that 2017 will close with economic growth of 4.8%, explained mainly by the good performance of exports, which may slowdown in 2018.

From the preface to Funides' Third Economic Situation Report: 

FUNIDES projects that the economy will close with a growth of 4.8 percent in 2017.  Consumption, after having slowed down during 2016 and much of 2017, now shows signs of some stability, except in the case of consumption of durable goods. There has been a slowdown in investments, while exports of goods and services have shown an acceleration even in the third quarter of the year, and have been a key element in sustaining the current rate of growth. However, there are decreases in exports of harnesses and a slowdown in the textile sector, which is expected to have almost zero growth. Manufacturing continued to be driven by increased activity in certain export products, such as sugar and meat, although less favorable international prices are forecast.  The deceleration in the collection of taxes on added value and on income continued, a trend that had been highlighted in the previous Conjuncture Report. The accumulated deficit of the INSS was less negative as a result of an effort to reduce expenses, in a scenario of increased revenues. Remittances continued to rise, reaching an increase of 10.6 percent in nominal terms in September, well above the recent average. This increase in remittances has been generating a positive effect on consumption in the last months of the year. We are noticing a slowdown in private investment, which could close in figures lower than those of last year.  

Costa Rica's Economy to Grow Less This Year

July 2017

The Central Bank has reduced its economic growth forecast from 4.1% to 3.8% for 2017, mainly due to a slower rate of growth in service industries.

From the Macroeconomic Program Review 2017-2018: 

The macroeconomic projections for the biennium 2017-2018 are based on an international context characterized by: (i) a greater rate of world growth; (Ii) orderly reaction of financial markets to increases in interest rates in the United States; (Iii) moderate inflation.  

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