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.
Central America must be the driving force behind a globally accepted document that will be vital for the recovery of the global economy and tourism in particular.
The generation of a physical or digital document of global acceptance (like national passports) that certifies that the bearer has been vaccinated against Covid-19 will facilitate the movement of people that has been severely restricted as part of the measures adopted by governments, both locally and internationally, to contain the pandemic.
The agile execution of economic stimulus programs, the considerable increase in public debt and the need to accelerate the process of economic reactivation are the lights, shadows and challenges identified a year after Alejandro Giammattei took office as president of Guatemala.
According to estimates, hotel occupancy for the December 27, 2020 to January 1, 2021 period will be 100% in the Pacific beaches and in the destinations located in Lake Atitlan. This dynamism is explained by the trips made by local tourists.
For the last days of the year, the sector's union predicts that hotel occupancy will rise to 70% in Antigua Guatemala, 50% in Peten and barely 20% in Izabal and the Verapaces.
As of June, Central American economies began to show signs of incipient recovery and as of August, Guatemala, Nicaragua and Costa Rica registered the smallest drops in their levels of economic activity.
Since March of this year, the region has faced a severe economic crisis generated by the outbreak of covid-19. The strict quarantines decreed, the closure of borders and commercial establishments, ended up damaging the dynamism of productive activities.
Almost three months before the gradual reopening of the Guatemalan economy, it is estimated that eight out of every ten consumers already visit supermarkets, while one out of every four people living in the capital have left for other departments in the country.
With the publication of Ministerial Agreement 187-2020, the Health Alert System for the covid-19 epidemic was made official and the authorities gradually eliminated restrictions on mobility and productive activities.
Arguing that this is misleading advertising, the Directorate of Consumer Services has sanctioned businesses that offer "covid-19 free zones" in the country's capital.
According to Guatemalan authorities, five establishments have already been sanctioned, since these businesses have offered free covid-19 tests or masks that ensure total protection against infection, which is classified as misleading advertising.
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%.
In Guatemala, since October 1st, shopping malls have reactivated their operations, and businessmen in the sector estimate that sales will be 40% of the levels reported before covid-19.
Although the government did not extend the State of Calamity and since October 1, Guatemala has been allowing the holding of events, fairs and concerts, the sector's businessmen believe that it is not profitable to hold meetings in which an area of 10 m2 per attendee is required.
Verifying the new levels of demand, offering only basic products or services, and delaying investments as much as possible to recover cash flow, are some of the strategies that businesses plan to implement to face the new commercial reality.
Because of the covid-19 outbreak in Central America, governments decreed strict home quarantines and restricted most economic activities and the movement of consumers.
In Guatemala, the Giammattei administration decided not to request an extension of the State of Calamity and as of October 1, cinemas, pubs, parks, swimming pools will be reopened and events, fairs and concerts will also be allowed, even if the place is on red alert.
After six months of closing the borders to commercial flights, air transport has been reactivated from September 18 with the arrival of four aircraft from the United States.
At the beginning of September, the Presidential Commission for Emergency Attention Covid-19 (COPRECOVID) had anticipated that the reactivation of operations at La Aurora and Mundo Maya International Airports would be carried out under the health protocols endorsed by health authorities and recommendations from International Civil Aviation.
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.
Focusing the skills of employees according to new opportunities and approving laws that allow for more flexible labor agreements are some of the proposals being discussed in Guatemala for companies to face the new labor reality.
Following the economic crisis that caused the outbreak of covid-19, the recovery and generation of jobs is one of the issues that occupies much of the attention of the government in Guatemala.
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