"Growth remains susceptible to adverse shocks to global growth, economic and socio-political stress in Nicaragua, the continued weakness in consumer and business confidence, and uncertainty regarding the implementation of the fiscal reform.”
After the slowdown in growth between 2017 and early 2019, the economy has recovered since mid-2019, as a result of a rebound in services, agriculture and manufacturing, which produced an estimated 2.1% growth in 2019, reported the International Monetary Fund (IMF).
Arguing that inflation expectations are within the target range, in Costa Rica the Central Bank decided to keep the monetary policy rate unchanged.
The last increase in the monetary policy rate was made in early November 2018, when the Central Bank of Costa Rica (BCCR) decided to raise it from 5% to 5.25%, arguing that forecasts suggest that inflation in 2019 could be above the upper limit of the target range.
Arguing that the predictions suggest that inflation in 2019 could be above the upper limit of the target range, the Central Bank of Costa Rica decided to raise the monetary policy rate from 5% to 5.25%.
From the statement of the Central Bank of Costa Rica:
November 1st, 2018. The Board of Directors of the Central Bank of Costa Rica (BCCR), in the session of October 31st, 2018, decided to increase the monetary policy rate (TPM) by 25 basic points to 5.25% annually. The Board of Directors also agreed to increase the gross interest rate on one-day deposits (DON) by 19 basis points to 3.23% annually. Both increases are in effect from November 1st, 2018.
Due to the recent strike in the construction sector, the entity has reduced projections of economic growth for this year from 5.6% to 4.6%.
However, recovery from the impact of the strike and the entry into operation of a large copper mine will lead to an upward revision of around one percentage point in the growth projection of 5.8% for 2019.
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.
Last year, economic activity and employment generation continued to rise, cumulative inflation reached 5.7% and international reserves were strengthened.
From a statement issued by the Central Bank of Nicaragua:
For the eighth consecutive year, Nicaragua continued to register a positive macroeconomic performance. Economic activity and job creation continued to grow and inflation remained stable, reaching a cumulative variation of 5.68 percent. The management of public finances continued to be prudent, international reserves were strengthened, while the financial system remained sound. An improved international context and good rainfall favored growth of exports, as well as an increase in the flow of family remittances and tourism which contributed to the strengthening of the country's external position.
Supported by greater growth in the US economy, better monetary conditions and a moderate boost in government spending, growth should accelerate gradually until it reaches a rate of 3.6% in 2019.
The mission of the International Monetary Fund (IMF) recognizes the macroeconomic stability that has been achieved, but warns of a need to approve a fiscal reform that allows the tax burden to be increased to at least 15% of GDP, and allocate that additional income to public investment, especially in social development, particularly pre-primary education, preventive health care and greater pension coverage.
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.
Forecasts are for lower economic growth this year, driven by a weakening of the terms of trade and more restrictive financial conditions, caused by the high fiscal deficit.
From a press release issued by the IMF:
I. Recent Developments
1. Both output and growth are at potential, while inflation has reemerged and is rising moderately.
It is expected that economic growth will increase slightly to 5.1% in 2017, and about 5.5% in the medium term, supported by the expanded Canal and developing investment projects.
From a press release issued by the IMF:
Panama’s economy is expected to remain among the most dynamic in the region. The economic outlook is favorable, albeit set against the backdrop of heightened external uncertainty.
Gross domestic product recorded a variation of 4.47% in the first quarter of 2016, driven in part by a 4% increase in final consumption expenditure.
From a report by the Central Bank "GDP and balance of payments in the first quarter of 2016":
Economic activity in the first quarter grew by 5.4% (annualized quarterly change), a result that is associated with the positive developments in external demand which increased by 17.5%.This trend was reflected in increased product placement by companies in special regimes related to the sale of equipment and medical devices as well as therecovery in the export of bananas, pineapples and services (4.9% ).
The IMF points to a greater vulnerability in the financial sector because of credit expansion in dollars and on the macroeconomic level because of the inability to reduce the fiscal deficit.
From a press release issued by the IMF:
On May 11, 2016, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation1 with Costa Rica.
The organization has closed its office in Managua citing the macroeconomic stability that the country has maintained since completion of the Extended Credit Facility program in 2011.
From a statement issued by the IMF:
IMF to Close Resident Representative's Office in Nicaragua
The International Monetary Fund will close its resident representative office in Managua which has been headed by Mr.
Nicaragua's economy recorded growth of 6.6% in the last quarter of 2015 and an average annual growth of 4.9%.
From a report by the Central Bank of Nicaragua:
In the fourth quarter of 2015, the Nicaraguan economy recorded growth of 6.6% and an average annual growth of 4.9% in the original data, according to the preliminary estimate of quarterly GDP (PIBT by its initials in Spanish).
Economic growth will range between 3.3% and 3.7% in 2016, led by banking, communications, agriculture, manufacturing, and recovery in the construction sector.
From a statement issued by the Central Bank:
The Board of the Central Bank of Honduras (BCH) in fulfilling its tasks, on February 17, 2016 by Resolution No.56-2 / 2016, approved the 2016-2017 Monetary Programme, which contains guidelines and policy actions, related to credit and exchange in the country, to be implemented in this biennium, based on the recent national macroeconomic performance and behavior and outlook for the world economy.