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.
"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).
In Panama the government estimates that in 2020 the economy will grow between 4% and 4.5%, a rise that would be determined by the behavior of construction, tourism and exports.
According to estimates from the Ministry of Economy and Finance (MEF), by the end of 2019 the increase in the Gross Domestic Product (GDP) could fluctuate between 3% and 3.5%, while by the present year 2020 it will be between 4% and 4.5%.
The Central Bank estimates that in 2020 economic growth will be 2.5%, which would exceed the 2.3% projected at the end of 2019.
The continuity in the application of public policies aimed at improving the environment for local consumption and investment, allows to foresee a slight rebound in the dynamics of production in 2020, with an estimated annual rate of 2.5%, reported the Central Bank (BCR).
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.
After registering a 7% year-on-year increase in July, in August the Confidence in Economic Activity Index in Guatemala showed a 6% variation.
According to the last report of the Banco de Guatemala, an inflationary rhythm of 4.51% is forecast for September and of 4.50% for October 2019. As to December 2019 and 2020, the Panel foresees an inflationary rhythm of 4.64% and 4.50%, in that order.
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.
For the Central Bank of Costa Rica, the projection of growth in production, which for this year is 3.2%, should be reviewed downward, because of the evolution that has shown the economic activity during the first half.
Considering the shocks that have affected national production so far in 2019, it is likely that this year economic growth will be below the 3.2% projected in the 2019-2020 Macroeconomic Program last January, explains the most recent report of the Central Bank of Costa Rica (BCCR).
According to the international organization the outlook is favorable and the risks to the economy are moderate, and production growth for 2019 is expected to range between 5.25% and 5%.
Economic growth rebounded to a record high of 7% in 2018, with positive momentum maintained in the early part of 2019, the International Monetary Fund reported after concluding its last visit to the Caribbean country.
For the entity, "growth has been accelerating since mid-2018 after three years of weak performance," and a variation of 3.4% of GDP is expected for 2019.
Backed by a positive fiscal boost, the recovery of exports after last year's decline resulting from a deterioration in the terms of trade, and the dynamism of private investment. Growth would peak at 3.7% in 2021, before converging towards the potential rate of 3.5% by 2024, the International Monetary Fund reported after its last visit to 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.