The World Bank predicts that by the end of this year Panama and the Dominican Republic will be the economies of the region that will grow the most, and the countries that will report the lowest increases in their production will be Costa Rica and Nicaragua.
After the region's economies were considerably affected in 2020 by the sanitary crisis generated by the Covid-19 outbreak, the outlook of international organizations for 2021 is encouraging.
Strengthening the confidence of economic agents through a solution to the problem of public finances and moving forward with the process of vaccinating the population are key factors for the Costa Rican economy to recover quickly in the new year.
The spread of covid-19 and the restrictions imposed at the local and global levels severely affected most of Costa Rica's productive sectors, to the extent that the unemployment rate climbed to historical levels, several businesses were closed and economic activity fell sharply.
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.
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.
Speeding up the repayment of the tax credit, repealing the Solidarity Tax, approving the Leasing Law, reforming the Banking Law and the Free Zone Law, is part of what Guatemalan businessmen are proposing to reactivate the economy in this context of crisis.
At present, Guatemala is immersed in a severe economic crisis, which was generated by the restrictions to productive activities that were decreed due to the outbreak of covid-19.
"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).
For the authorities of the Central Bank, the economy begins to show signs of recovery, because for four consecutive months the economic activity has registered a positive performance.
In June of this year, the Monthly Economic Activity Index (IMAE) began to show signs of recovery, recording a 1.2% year-on-year increase. In July and August, positive variations continued, with 1.4% and 1.7% increases reported, respectively.
The effects of the reduction in the Monetary Policy Rate and the lowering to 12% of the minimum legal reserve for banks will take months to be perceived, and without other parallel actions that impact the business sector more quickly and effectively, the economic reactivation of Costa Rica will not be possible in the short term.
According to the latest report of the Central Bank of Costa Rica (BCCR), when comparing the level of economic activity recorded in March this year with the same month of 2018, it is observed that most economic activities slow down their growth, which was reflected in the slowdown of the general indicator. See full report.
During the new year, the main challenge for Costa Rica's economy will be to increase above 3%, given that 2018 was marked by a context of fiscal uncertainty and economic slowdown.
According to the Central Bank of Costa Rica, economic growth, measured by the year-on-year variation of the trend cycle of gross domestic product (GDP), slowed last year, and recorded to the third quarter a 2.1% rate (3.2% in the same period of 2017 and 2.8% as the average rate of the two previous quarters).
The IMF highlighted the progress made in the fiscal area and projects low inflation and economic growth of 3.6% for 2016.
From a press release issued by the IMF:
An International Monetary Fund (IMF) mission, led by Roberto Garcia-Saltos, visited Tegucigalpa on September 24 to October 6 to conduct the second review of Honduras’ Fund-supported program.
The GDP growth projection of 4.5% for 2015 reflects the positive effect of increased investment and the reduction in oil prices.
From a statement issued by the Nicaraguan Foundation for Economic and Social Development (Funides):
The Nicaraguan Foundation for Economic and Social Development (FUNIDES) projects in its first Economic Situation report of the year that in 2015 the economy will grow by 4.5%.
Construction, mining and financial sectors drove growth in the Gross Domestic Product in the first six months of the year.
From a statement issued by the Ministry of Economy and Finance of Panama:
Growth projection for the closure of the 2014 is held in 7%, leading the region.
Panama's economy grew by 6.2%, in the first six months of 2014, to be located the Gross
In 2004 Panama's GDP was $13 billion, and with the momentum led by the transport, storage and communications sectors, in 2011 it exceeded $23 billion.
Panamaamerica.com reports that " Panama’s gross domestic product, valued at constant prices, has increased since 2004 when it was $13.09 billion, going to approximately 23.25 billion dollars last year.
Production rose by 5.16% in the last 3 months of 2011, the most dynamic period of the year.
Data released by the Central Bank on the behavior of gross domestic product (GDP) show that the last quarter of 2011 saw a growth in production of 5.16% compared to the fourth quarter of 2010, the highest of all quarters in 2011.
However, this result did not influence the final growth projected by the Central Bank of 4.2% reported Elfinancierocr.com.
FUNIDES has projected economic growth of 3.5% to 4% for 2011-2013, noting that these are various risks that make the projections err towards the downside.
The executive summary of the second situation report by the Nicaraguan Economic Foundation for Economic and Social Development (FUNIDES) 2011 begins:
1. The economic recovery that began in the second half of 2009 continued (albeit at a slower rate) in the first quarter of 2011, driven both by exports and by investment, consumption and government spending.