The World Bank predicts that by the end of this year Panama and the Dominican Republic will be the economies of the region that will grow the most, and the countries that will report the lowest increases in their production will be Costa Rica and Nicaragua.
After the region's economies were considerably affected in 2020 by the sanitary crisis generated by the Covid-19 outbreak, the outlook of international organizations for 2021 is encouraging.
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.
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.
Financial Intermediation, and Manufacturing Industries, largely determined the 2.5% increase in GDP during the fourth quarter of last year, compared to the same period in 2018.
Financial Intermediation, Insurance and Pension Funds increased 1.7%, boosted by income received from commissions and interest on the loan portfolio, reported the Central Bank of Honduras.
Agriculture, livestock, forestry and fisheries, and financial intermediation largely determined the 2.4% increase in GDP in the third quarter of last year, compared to the same period in 2018.
Agriculture, Livestock, Forestry and Fishing registered a 2.6% increase, mainly because of the rise in the Gross Added Value (GVA) of coffee cultivation as a result of reseeding, maintenance and fertilization in the farms during the third quarter, informed the Central Bank of Honduras (BCH).
In its latest update of economic growth projections for 2019, ECLAC estimates that the Dominican Republic will close the year with a 5% increase, followed by Panama, which would reach a growth rate of 3.7%.
According to economic growth projections for Latin America, which were estimated by the Economic Commission for Latin America (ECLAC) and updated in November, the Dominican Republic will be the country in the region that will increase its production the most this year.
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%.
Construction and financial intermediation largely determined the 1.9% increase in GDP in the second quarter of the year compared with the same period in 2018.
Financial Intermediation increased 1.2% during the second quarter of 2019, explained by the increase in income received by financial institutions from commissions on financial services (credit and debit cards, drafts and transfers, account management and trusts), plus interest derived from the credit portfolio, reported the Central Bank of Honduras.
Financial Intermediation and the Manufacturing Industry determined to a large extent the 3.5% increase registered in the Gross Domestic Product during the first quarter of the year, with respect to the same period of 2018.
For the IDB, investment in infrastructure is the most important priority when increasing the probability of improving productivity and reaching higher per capita income levels in the countries of the region.
The Inter-American Development Bank (IDB) published its report "Building Opportunities for Growth in a Challenging World," in which it addresses the benefits of infrastructure investment and its influence on productivity growth in the countries of the region.
Guatemala and El Salvador are the Central American economies that have registered the lowest levels of economic growth, when this is associated with the size of their public sector.
Panama, Nicaragua, Honduras and Costa Rica are the countries that would be obtaining exceptional results in their economic growth from the average expenditure of the region during 2011 to 2018, which could be associated with the investment made in past periods, informed the Central American Institute of Fiscal Studies (Icefi).
The behavior of the activities of Financial Intermediation, Agriculture, Livestock, Forestry and Fisheries, explained part of the year-on-year increase of almost 5% reported in the Gross Domestic Product during 2018.
In the fourth quarter of 2018, the seasonally adjusted series reflected a real GDPT4 growth of 1.2% over the previous quarter, year-on-year (compared to the fourth quarter of 2017) was observed a rise of 4.2%, so the accumulated annual variation rate stood at 3.7%, reported the Central Bank of Honduras (BCH).
Agriculture and communications largely determined the 3.1% increase recorded in the Gross Domestic Product during the third quarter of the year, compared to the same period in 2017.
During the third quarter of 2018, the out-of-season series of the GDPT showed a 0.7% increase in real terms, when compared to the level of the second quarter. With this, the GDPT increased 3.1% year-on-year, reaching an accumulated rate of 3.4% in 2018, informed the Central Bank of Honduras.
Higher domestic demand and increased investment are the factors that will influence the 3.3% growth forecast for the regional economy next year.
According to forecasts by the Economic Commission for Latin America and the Caribbean (ECLAC), in 2019 Panama will be the economy with the highest growth in Central America, with an expected rate of 5.6%.
The Central Bank has revised down its year-on-year GDP growth forecast for 2018, from the range of 3.8% to 4.2%, projected at the beginning of the year, to a range of 3.6% to 4%, but has kept the projection of inflation unchanged.
From a statement issued by Banco Central de Honduras:
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