During March 2021, the Monthly Index of Economic Activity reported a variation of 13% when compared to the levels reported in the same month of 2020, a period that was marked by the closure of the economy due to the pandemic.
The economic activities that most contributed to the positive result were: Manufacturing Industry and Commerce, and to a lesser extent, Mail and Telecommunications, Financial Intermediation and Other Services -related to health and net taxes-. These contributions were partially offset by the negative variations in agricultural activities, Transportation and Storage, and Hotels and Restaurants, highlights the report of the Central Bank of Honduras (BCH).
Reducing costs and barriers to foreign trade in Central American economies is key for the region to overcome the economic recession caused by the outbreak of Covid-19.
A report prepared by the World Bank explains that boosting economic activity and employing a higher percentage of the labor force are objectives that can be achieved through reforms that strengthen the private sector and attract investment.
After in January 2021 in the context of the crisis caused by the pandemic, the Monthly Index of Economic Activity at the national level reported a 6% decrease in year on year terms, in February a smaller drop was registered, amounting to 3.5%.
The drop recorded in February continues to reflect the negative effects of the Covid-19 pandemic and the damage caused by the tropical storms of November 2020, affecting the evolution of most economic activities, mainly in "... Agriculture, Livestock, Forestry and Fishing; Manufacturing Industry; Transportation and Storage; Hotels and Restaurants; Commerce; and Private Construction; these contractions have been partially offset by the boost in the services of Mail and Telecommunications and Financial Intermediation", informed the Central Bank of Honduras (BCH).
Twelve months after Central America began a health and economic crisis triggered by the covid-19 outbreak, Guatemala was the fastest recovering economy and Panamanian economic activity is the slowest to return to pre-pandemic levels.
In March 2020, the first cases of covid-19 began to be detected in the countries of the region. The highly contagious disease, which at that time had already claimed the lives of thousands of people around the world, forced Central American governments to establish mobility restrictions.
Strengthening trade between the US and the region, fighting corruption in the Northern Triangle and reducing illegal migration flows, are some of the axes on which Joe Biden, the US president who has been sworn in, is expected to focus.
Biden, representative of the Democratic Party and winner of the last US elections, whose results were close, arrives at the White House to replace Donald Trump.
As a result of the pandemic in May 2020, the IMAE hit bottom by falling 22% year-on-year, but from June onwards, smaller falls began to be reported and in October the decline was barely 1%; however, in November the country fell back by 12%.
National production, measured through the original series of the Monthly Index of Economic Activity (IMAE), reflected a 12% year-on-year decrease in November 2020, determined by the negative impact of the pandemic, to which was added the losses in production due to the flooding caused in the national territory in the first half of November by the occurrence of tropical storms Eta and Iota.
Because of the fall in economic activity and the restrictions imposed to contain the spread of covid-19, businessmen in Costa Rica and Panama predict that the process of economic recovery will not be completed in the near future.
In this crisis scenario generated by the covid-19 outbreak, the Costa Rican economy does not show clear signs of recovery, since during November 2020 the Monthly Index of Economic Activity reported a year-on-year fall of 6.2%, a decline similar to that reported in October, when it was 6.3%.
In order to mitigate the spread of the coronavirus in the country, from January 10 to 17, a curfew will be applied between 9:00 p.m. and 5:00 a.m. the following day, and children will also be prevented from entering stores.
The exception in the circulation in not allowed schedules is subject to institutions described in the current PCM, transport of heavy load and person with safe-conduct authorized by the Secretary of Security, details an official document.
At the end of 2020, Honduras, Nicaragua, Guatemala and El Salvador remained at the bottom of the Human Development Index ranking, while Costa Rica and Panama were better evaluated.
The report entitled The Next Frontier, Human Development and the Anthropocene, which was published on December 15, 2020 at the global level, updates the Human Development Index (HDI) that is calculated by the United Nations Development Program (UNDP).
Although the end of the year holidays is a threat to Central America for a second wave of covid-19 infections, it is expected that total closures will not be decreed since there are currently effective health control options, and less costly for the economy.
When the first cases of covid-19 were reported in the region in March 2020, most governments decided to paralyze a large part of productive activities and decree home quarantines.
The next U.S. president is not yet known, but in the region it is expected that in an eventual new Trump administration, the focus will be on the recovery of the U.S. economy, while an eventual Biden administration would focus on countering corruption and illegal migration.
Two days after Election Day took place, the United States is experiencing an atmosphere of tension and uncertainty, since because the results are closed, neither candidate can yet be declared the winner.
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.
Verifying the new levels of demand, offering only basic products or services, and delaying investments as much as possible to recover cash flow, are some of the strategies that businesses plan to implement to face the new commercial reality.
Because of the covid-19 outbreak in Central America, governments decreed strict home quarantines and restricted most economic activities and the movement of consumers.
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 Council of Ministers approved that Tegucigalpa and San Pedro Sula will return from July 29 to Phase I of the Opening Plan, which allows companies to operate with 20% of their workforce.
According to the proposal put forward by the Multisectoral Table, commerce and companies in general were authorized so that as of Wednesday, July 29, they can resume their activities and business, according to the percentage of the workforce, as per the authorized region, using the biosecurity protocols approved by the Ministry of Labor and Social Security.