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.
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.
Excluding Nicaragua, the economies of Central American countries are projected to increase 2%, however, for the business sector some of the expectations may be too optimistic.
The 5.6% growth estimate for Panama is too optimistic for the private sector, as no major changes are expected compared to 2018.
The president of the National Council of Private Enterprise, Severo Sousa, explained to Panamaamerica.com.pa that "...
The Bank of Guatemala expects next year's economic growth to be better than in 2018, which would be caused by higher public spending and the growth of family remittances.
Authorities of the Bank of Guatemala (Banguat) informed that the Guatemalan economy will close 2018 with a nearly 3% growth, however, for next year is expected that the increase in GDP will be in the range between 3% and 3.8%.
Although some uncertainty is projected next year in Guatemala, because of the presidential and legislative elections scheduled for June, it is estimated that the economy will increase 3.2%.
According to the Center for National Economic Research (Cien), it is expected that in 2019 there will be some uncertainty derived from the changes in the three branches of government.
The region is expected to conclude 2018 with a rise of just over 4% in the volume exported and just 3.6% in value, due to the fall in international prices of several agricultural products.
According to the International Trade Outlook for Latin America and the Caribbean 2018, published by the Economic Commission for Latin America and the Caribbean (ECLAC), it is expected that this year Central America will export larger volumes at lower prices.
The Confidence Index in Economic Activity in Guatemala registered a year-on-year fall of 33% in July of this year and in August a 20% drop was registered, compared to the same period last year.
The most recent Economic Expectations Survey prepared by Banco de Guatemala, forecasts an inflationary rhythm of 3.90% for August, 4.01% for September and 4.03% for October 2018.As for December 2018 and 2019, the Panel foresees an inflationary rhythm of 4.07% and 4.22%, in that order.In addition, for a horizon of 12 and 24 months (August 2019 and August 2020) the Panel forecasts an inflationary rhythm of 4.07% and 4.33%, respectively.
In line with the trend seen since last year, in July 2018, the Confidence Index of Economic Activity in Guatemala fell by 33% with respect to the same month in 2017.
The latest Economic Expectations Survey prepared by Banco de Guatemala forecasts an inflationary rhythm of 4.19% for July, 4.22% for August and 4.36% for September 2018.As for December 2018 and 2019, the Panel foresees an inflationary rhythm of 4.45% and 4.43%, in that order.In addition, for a horizon of 12 and 24 months (July 2019 and July 2020), the Panel forecasts an inflationary rhythm of 4.26% and 4.36%, respectively.
Reinforcing the trend reported since last year, in June 2018, the Confidence Index of Economic Activity in Guatemala fell by 36% compared to the same month in 2017.
In the most recent Economic Expectations Survey conducted by the Banco de Guatemala,an inflationary rhythm of 4.25% for June, 4.24% for July and 4.37% for August 2018is forecast. As for December 2018 and 2019, the Panel foresees an inflationary rhythm of 4.47% for both years.In addition, for a horizon of 12 and 24 months (June 2019 and June 2020) the Panelforecasts an inflationary rhythm of 4.35% and 4.43%, respectively.
In line with the decreasing trend that has been reported since last year, in May 2018, the Confidence Index of Economic Activity in Guatemala fell by 42% compared to the same month in 2017.
According to a survey carried out by Banco deGuatemala, an inflationary rhythm of 4.09% is forecast for May, 4.12% for June and 4.09% for July 2018. Regarding expectations for the end of the year, the consulted businessmen expect December to close with inflation of 4.50%.In addition, for a horizon of 12 and 24 months (May 2019 and May 2020), the Panel forecasts an inflationary rhythm of 4.31% and 4.48%, respectively.
Continuing with the decreasing trend that has been reported since last year, in March 2018 the Confidence Index of Economic Activity fell by 30% with respect to the same month in 2017.
According to a survey carried out by Banco de Guatemala, an inflationary rhythm of 4.34% is forecast for March, 4.40% for April and 4.38% for May 2018.As for December 2018 and 2019, the Panel foresees an inflationary rhythm of 4.54% and 4,65%, in order.
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.
Following the downward trend registered since last year, in February 2018 the Confidence Index of Economic Activity fell by 38% compared to the same month in 2017.
According to the survey carried out by Banco de Guatemala, an inflationary rhythm of 4.7% is forecast for February, 4.6% for March and 4.6% for April 2018.As for December 2018 and 2019, the Panel foresees an inflationary rhythm of 4.6% and 4.7%, in that order. In addition, in a forecast for 12 and 24 months (February 2019 and February 2020) the Panel foresees an inflationary rhythm of 4.67% and 4.56%, respectively.
As of January 2018, the Confidence Index of Economic Activity fell 31% with respect to the same month in 2017, reinforcing the downward trend registered since last year.
During the first month of the year, economic expectations varied compared to those collected in December 2017, as 2018 is expected to close with an inflationary rhythm of 4.9% (last December the expectation stood at 4.5%) and with the Real Gross Domestic Product registering growth of 3.1% (in the last month of 2017 an increase was estimated for 2018 of 3.2%).
The Confidence Index of Economic Activity as of December 2017 was down 41% compared to the same month in 2016, reflecting a loss of confidence in the economy in the last year.
According to the economic expectations collected at the end of 2017, it is expected that 2018 will close with an inflationary rhythm of 4.5% and that the Real Gross Domestic Product will register a growth of 3.2%.