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.
Nicaraguan businessmen believe that electoral reform is essential to reactivate the country's economic activity, which has been in decline since the crisis erupted in 2018.
According to estimates by the International Monetary Fund (IMF), Nicaragua's Gross Domestic Product contracted by 5.7% in 2019, a drop that complements the year-on-year variation of -3.8% recorded in 2018.
After production in Nicaragua fell 3.8% in 2018, the IMF estimates that during 2019 the GDP will contract by 5.7%, however, the agency predicts that by 2020 the variation could be only -1.2%.
Real GDP is estimated to have contracted by another 5.7% in 2019 due to the deterioration in aggregate demand, fiscal consolidation and sanctions, the IMF reported after its visit to the country.
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 having recorded a 4% fall in GDP in 2018, the Central Bank authorities forecast that the Nicaraguan economy will begin to recover in the 2020-2021 period.
The outlook for some economies in the region for 2019 is not the best: in Nicaragua GDP is expected to fall between 5% and 7%, while in Costa Rica the growth estimate at the end of the year was reduced from 3.2% to 2.2%.
The estimates of the Nicaraguan Foundation for Economic and Social Development (Funides), presented in its "Informe de Coyuntura - Julio 2019", indicate that by 2019 an economic contraction of between 5.4% and 6.8% will be reported in the country.
If the country does not provide an early solution to the socio-political crisis it has been going through since April 2018, it is projected that the economy could decline between 7% and 11% during 2019.
The Nicaraguan Foundation for Economic and Social Development (Funides), presented the "Informe de Coyuntura" (Situation Report), which explains that if the socio-political crisis continues this year there will be a greater fall in the economy compared to the 4% reported in 2018.
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%.
It would be followed by Honduras, with expected 3.6% GDP growth, Guatemala with 3%, Costa Rica with 2.9% and El Salvador, with an increase of 2.4%. Only in Nicaragua is the economy expected to decline. According to ECLAC, GDP will fall by 2%.
New World Bank projections estimate that because of Nicaragua's political crisis, the country's GDP will fall 4% this year and 1% in 2019.
According to the expectations of the international organization, Nicaragua will be the only economy that will decrease in Central America, because of the political and social crisis in which the country is involved since last April, it is expected that the Gross Domestic Product (GDP) will decrease 3.8% in 2018 compared to 2017.
Five months after the socio-political crisis in Nicaragua, it is estimated that this year Gross Domestic Product will contract between by 2.1% and 4%, in real terms.
The Nicaraguan Foundation for Economic and Social Development (FUNIDES) has updatedits estimates on the economic and social impact of the crisis in 2018, in which it poses a first scenario that assumes that people and companies will adapt to a "new reality". In this context, the losses in added value would amount to $946 million.
Last year hotel and restaurant activities in Nicaragua grew by 6% compared to 2016 and added $500 million to the GDP, which represents 4% of the total production.
According to figures from the Central Bank of Nicaragua, last year the activities of hotels and restaurants "... grew by 7%, favored by an increase in the arrival of visitors from abroad and an increase in arrivals of cruise ships to the country's main ports."
The Central Bank of Nicaragua forecasts that by the end of 2017 the economy will have grown by between 4.7% and 5.2%, and next year the increase will be between 4.5% and 5%.
From a report by the Central Bank:
The President of the Central Bank of Nicaragua (BCN), Cro.Ovidio Reyes R., presented a general balance of the State of the Nicaraguan Economy during 2017 and the Perspectives for 2018, highlighting that it is estimated that for the current year there will be robust economic growth between 4.7% and 5.2% and inflation between 5% and 6%.The projected economic growth is similar to that of the last 7 years, in which the rate of the Gross Domestic Product (GDP) has averaged 5.2%.
The Central Bank estimates that GDP will grow between 4.5% and 5%, and inflation will be in the range of between 5.5% and 6.5%.
From a statement issued by the Central Bank:
The President of the Central Bank of Nicaragua (BCN), Ovidio Reyes Ramirez, presented on January 5, 2017 an overall assessment of the performance of the Nicaraguan economy in 2016 and also the prospects for 2017, noting that it is estimated that robust economic growth will be achieved of between 4.6 and 4.9% for 2016 for the sixth consecutive year, and annual inflation of 3.13 percent.
The institution confirmed a positive outlook for the medium term, projecting economic growth of 4% and inflation of 3.5% by the end of the year.
From a press release issued by the International Monetary Fund:
A mission from the International Monetary Fund (IMF) headed by Mr. Gerardo Peraza visited Managua from 20 to 29 October 2015 in the context of the Article IV consultation.