Citing congruence between the recent figures on remittances and economic growth with those estimated for this year, the Banco de Guatemala has decided to keep the monetary policy rate unchanged.
From a statement issued by the Bank of Guatemala:
Guatemala, April 26, 2018.The Monetary Board, in its session held on April 25, based on a comprehensive analysis of the external and internal economic situation, after having seen the Balance of Inflation Risks, decided to maintain the level of the leader monetary policy interest rate at 2.75%.
In spite of the economic progress that has been achieved in Costa Rica, employment growth has stagnated, results in education are deficient, and anti-competitive regulations continue to hinder business development.
The latest OECD economic study on Costa Rica details the factors that support the significant socio-economic achievements of the last decades, as well as the pending challenges to ensure sustainable and more inclusive growth.
The Central Bank projects that the Honduran economy will grow between 3.8% and 4.2% this year, and that inflation will remain in the range of between 3% and 5%.
The Central Bank details in its report that "...According to projections for the world and national economy, the BC's forecasts indicate that domestic inflation for 2018-2019 will be within the tolerance range of 4.0% ± 1.0 pp."
Activities of the canal and air and financial services accounted for most of the 5.4% growth recorded in GDP over the past year.
The Comptroller General of the Republic reported that the increase reported in 2017 "... is explained primarily by the behavior of economic activities related to the external sector. Among them, those of the Panama Canal, air and financial services stand out positively.On the other hand, trade in the Colon Free Zone, showed a decrease."
The plan proposed by the Morales administration to increase the country's competitiveness focuses on the development of forestry, agriculture, textiles, clothing and footwear, metalworking, light manufacturing, tourism and construction, among other things.
Authorities at the National Program for Competitiveness -Pronacom- presented guidelines for the National Competitiveness Policy 2018-2032. This set of strategies, which aims to establish guidelines on competitiveness at the national and regional level for the next 15 years, was developed jointly by the productive sector, public sector, academia and civil society.
Economic growth in 2017 exceeded expectations, and although the outlook for 2018 is optimistic, the entity points out that there is a need to reduce tax expenditure and rationalize subsidies.
From a statement issued by the IMF:
Economic performance in 2017 was above expectations and the 2018 outlook is favorable. To minimize downside risks, Nicaragua needs to further fortify its policy framework by (i) hastening the implementation of the international taxation law, reducing tax expenditures, rationalizing subsidies, and implementing a comprehensive reform of the Social Security, (ii) enhancing the supervisory perimeter, (iii) reinforcing the AML/CFT framework, and (iv) building financial buffers and further increasing international reserves.
Claiming that in the last few months inflation expectations have increased, the Central Bank has raised the monetary policy rate from 4.75% to 5%, from February 1st.
The Central Bank argues that the price of oil has maintained a bullish behavior since July 2017. This situation, with a backlog, is transferring to the local price of fuels, with a potential transmission in the coming months towards other prices.
The Central Bank has reported that in the third quarter of the year the Gross Domestic Product registered an interannual increase of 6.5%, mainly explained by the manufacturing industry and the agricultural sector.
From the quarterly report by the Central Bank:
DURING THE III QUARTER OF 2017 ECONOMIC ACTIVITY CONTINUED REGISTERING DYNAMISM HAVING GROWN 2.0%
For the sixth time in the year and arguing future inflationary pressures, the Central Bank has raised the monetary policy rate to 4.75% as of November 30.
Consulted on the matter by Nacion.com, economist Alberto Franco said that "...Before the absence of clear signs of greater inflationary pressures and a slowdown in local economic activity in recent months, this measure, in my opinion, could seek, fundamentally, to preserve the premium for investing in colones, in the face of a very likely increase in the reference rate of the Central Bank of the United States, the FED, in this next month of December."
"More than half of the adult population has not managed to approve the second cycle of secondary education, meaning that many Costa Ricans will have to acquire new skills in order to take advantage of new job opportunities."
From a report by the OECD:
18/10/2017 - Costa Rica enjoys relatively high life satisfaction levels, but should do more to develop a more inclusive and sustainable economy, according to a new OECD report.
In the view of the OECD, "the country depends to a large extent on a few sectors, such as construction, the financial sector and the Panama Canal, which will be insufficient to support greater socio-economic progress and greater inclusion."
The "Multidimensional Study of Panama," produced by the Organization for Economic Co-operation and Development (OECD), concludes that the country needs more resources to finance investment in key social areas, including education and skills.
As of July 2017, the IMAE recorded a cumulative growth of 5.4%, in which the activities with the greatest contribution were manufacturing and livestock.
From a report by the Central Bank, "State of the Economy and Prospects 2017":
The evolution of the main economic and financial indicators of the country during the first eight months of the year confirms the robustness of the economy and validate the growth forecasts for 2017, with highlights being dynamism of the IMAE, recovery of exports, a prudent fiscal policy and low inflation.In this context, the country's external position has improved, international reserves have strengthened, the stability of the exchange rate regime has been preserved and the performance of the financial system has remained solid.
Transportation, storage and communications, construction and mining activities accounted for most of the 5.8% growth in GDP during the first half of the year.
From a statement issued by the Ministry of Economy and Finance:
Economy and Finance Minister Dulcidio De La Guardia was optimistic about the economy's results during the first half of 2017, which point to a growth of 5.8% in Gross Domestic Product (GDP).
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.
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 ofthe activities that will show reduced performance is construction, whose expected growth rate fell from 3.6% to 3.4%.
In its review of the monetary program, the Central Bank has raised the expected economic growth rate for the biennium 2017-18, from 3.4% - 3.7%, to 3.7% - 4.1%.
From the executive summary of the report "Review of the 2017-18 monetary program" by the Central Bank:
The Board of Directors of the Central Bank of Honduras (BCH), in fulfillment of its powers, presents the Monetary Program (MP) Review 2017-2018 published in March of this year. This document contains an update of the macroeconomic framework for the aforementioned biennium, adapting it to thefirst half of year of the international and domestic economy, as well as to the latest perspectives on the world economy.