According to Fitch Ratings, even though the economic scenario has improved, Central American banks face challenges related to the quality of their assets.
Central American banking systems have weathered the financial crisis relatively well. Even though profits fell considerably during 2009, industry solvency levels remain good. Profits fall mostly because banks opted for liquid assets and increased their expenses in provisions.
The global recovery is off to a stronger start than anticipated earlier but is proceeding at different speeds in the various regions.
A Policy-Driven, Multispeed Recovery
Following the deepest global downturn in recent history, economic growth solidified and broadened to advanced economies in the second half of 2009. In 2010, world output is expected to rise by 4 percent.
The global recovery is off to a stronger start than anticipated earlier but is proceeding at different speeds in the various regions.
A Policy-Driven, Multispeed Recovery
Following the deepest global downturn in recent history, economic growth solidified and broadened to advanced economies in the second half of 2009. In 2010, world output is expected to rise by 4 percent.
Fitch Central America published a special report called "Central American Insurance Sector: Performance in the First Half of 2009 and Outlook for 2010".
Despite the economic contraction of Central American economies in the first half of 2009, the region's insurance industry grew 3% (excluding Panama) when compared to the same period of 2008, reaching $928.1 million in net premiums.
Economic recovery from the international crisis in Latin America and the Caribbean will be quicker than expected a few months ago.
In its annual report Preliminary Overview of the Economies of Latin America and the Caribbean 2009, the regional commission of the United Nations projects positive growth rates for most countries, but explains that there is still doubts about whether this recovery will be sustainable over time, given that the external scenario continues uncertain, which may affect growth expectations in the region.
Fitch Ratings issued a special report: "Central American Banking: Evolution of the Crisis and Learnt Lessons".
In Fitch's opinion, the negative impact the international crisis had on Central American banks was very evident in 2009. The current economic context poses growing risks for the sector, as well as an important challenge for this year.
"Banking systems of the region have witnessed a sensible reduction in their cumulative results in the first half of the year, mainly caused by a considerable increase in delinquent loan reserves", states the report. "These results will continue under pressure in the following months, and their potential bounce-back will depend on an improvement of the economic environment, which Fitch does not expect before 2010".
You can find data on national accounts, inflation, unemployment, payment balance, fiscal indicators, international trade and raw material prices.
The IMF published a series of selected macroeconomic data and raw material prices by country and region, with a two year projection, as part of the statistical appendix to the biannual report on global economic prospects.
FMI: "Recessions associated with financial crises tend to be severe. Recoveries from such recessions are typically slow."
If such recessions are globally synchronized then they tend to last even longer and be followed by recoveries that are even weaker.
Countercyclical policies can be helpful in ending recessions and strengthening recoveries. In particular, expansionary fiscal policies seem particularly effective.
FMI: "Recessions associated with financial crises tend to be severe. Recoveries from such recessions are typically slow."
If such recessions are globally synchronized then they tend to last even longer and be followed by recoveries that are even weaker.
Countercyclical policies can be helpful in ending recessions and strengthening recoveries. In particular, expansionary fiscal policies seem particularly effective.
The Latin American Economic Outlook 2009 will be presented on 28 October 2008 at the XVIII Iberoamerican Summit of San Salvador
Are Latin American governments maximising the potential of fiscal policy as a development tool? This 2009 edition of the annual OECD Latin American Economic Outlook analyses the progress governments in the region have achieved in the fiscal realm during the last decade.
The Latin American Economic Outlook 2009 will be presented on 28 October 2008 at the XVIII Iberoamerican Summit of San Salvador
Are Latin American governments maximising the potential of fiscal policy as a development tool? This 2009 edition of the annual OECD Latin American Economic Outlook analyses the progress governments in the region have achieved in the fiscal realm during the last decade.
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