Although expectations for the end of 2021 are good for the Guatemalan economy, there is uncertainty regarding what will happen in the second part of the year, as the vaccination process is progressing slowly.
According to World Bank forecasts published in June 2021, it is expected that at the end of the year, Guatemala's Gross Domestic Product will grow 3.6% year-on-year.
Reducing costs and barriers to foreign trade in Central American economies is key for the region to overcome the economic recession caused by the outbreak of Covid-19.
A report prepared by the World Bank explains that boosting economic activity and employing a higher percentage of the labor force are objectives that can be achieved through reforms that strengthen the private sector and attract investment.
During March 2021, the Panamanian Consumer Confidence Index increased 2% with respect to the level reported in January of this year, this slight increase is reported in the context of the economic reactivation process of local production.
According to the survey conducted by the Chamber of Commerce, Industries and Agriculture of Panama (CCIAP), in strategic alliance with The Marketing Group, expectations on the probability of saving money decreased 3 percentage points, presenting a result of 75 points, below the equilibrium point, for the measurement of March 2021, so it remains at levels of marked distrust.
The next U.S. president is not yet known, but in the region it is expected that in an eventual new Trump administration, the focus will be on the recovery of the U.S. economy, while an eventual Biden administration would focus on countering corruption and illegal migration.
Two days after Election Day took place, the United States is experiencing an atmosphere of tension and uncertainty, since because the results are closed, neither candidate can yet be declared the winner.
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.
Agriculture, Financial and Insurance Activities, and Real Estate Activities, are the sectors that in Guatemala and in the context of the economic reopening, have increased their growth forecasts for 2020.
In June, when mobility restrictions were severe in the country due to the outbreak of covid-19, the Bank of Guatemala (Banguat) predicted that by the end of the year, Agriculture would grow by 1.1%, Financial and insurance activities by 2% and Real estate activities by 2.8%.
After the unemployment rate in the United States fell from 15% to 8% between April and August, it became evident that at the beginning of the crisis the capacity of recovery that the North American country could develop was underestimated and it is expected that this behavior could boost the economic activity in Central America.
During the first half of 2020, when the first cases of covid-19 began to be reported in the region, forecasts noted that the recovery of economic activity would be excessively slow, due to a significant drop in consumption globally.
By the fourth quarter of 2020, 21% of companies in the country expect to reduce their payrolls, a proportion that is higher than the 14% registered in the third quarter of this year, a rise that is explained by the economic crisis generated by the covid-19.
Panamanian employers report negative hiring expectations for the October-December period. Three percent of the employers expect to increase their workforce, however, 21 percent expect to reduce it, while 68 percent remain unchanged, resulting in a Net Employment Trend of -18%.
Between February and August of this year, the proportion of consumers in Costa Rica who expressed pessimism regarding the country's economic future increased from 33% to 47%, a rise that can be explained by the crisis resulting from the outbreak of covid-19.
According to the Consumer Confidence Survey conducted during August 2020 by the School of Statistics of the University of Costa Rica, people in the country expect increases in the cost of their loans in the next 12 months.
Variations indicating a certain improvement in the world economy, the reopening of different markets and the recovery of exports are some of the factors that could influence Guatemala's economic activity to decrease less than expected in 2020.
After the reopening phases that were supposed to be applied in El Salvador were declared unconstitutional and the restrictions to economic activities were removed, businessmen receive the news with optimism, but fear that some businesses have closed down because of the crisis.
Since March, when the first cases of covid-19 began to be registered in the country, the administration headed by Nayib Bukele decided to subject the country to a strict home quarantine.
At the height of the pandemic and economic crisis, the Costa Rican president announced, on a national chain, an economic recovery plan with no clear direction, no assigned leaders and no concrete actions.
In the message broadcast on the night of July 12, President Carlos Alvarado vaguely explained part of the plan to be adopted to overcome the health and economic crisis generated by the spread of covid-19.
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.
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.
Between February and May of this year the Consumer Confidence Index registered a 40% drop, which was caused by the health and economic crisis resulting from the covid-19 outbreak.
According to the Consumer Confidence survey conducted by the University of Costa Rica, between August and November 2019 the Consumer Confidence Index (CCI) rose from 28.5 to 32.3, however, by May of this year it had fallen to 19.7.
After the Economic Activity Confidence Index reported a 19% drop in March 2020, in April the situation worsened with a -43% year-on-year variation, a drop that agrees with the advance of the health crisis in the country.
In April 2020, the level of the Economic Activity Confidence Index stood at 32.64 points, 43.25% lower than that recorded in March 2020 (57.52 points) and fell by 26.83% compared to April 2019 (44.61 points), reported the Bank of Guatemala.