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.
Promoting a risk management culture, defining possible scenarios by turning uncertainty into a variable and preparing to safeguard the company's operational continuity are some of the most important strategies for facing the coming year.
The pandemic that generated the spread of covid-19, caused changes in all business sectors and also generated an environment of uncertainty regarding the future of the economy.
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.
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.
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.
Although the sector keeps its operations alive thanks to the packaging they produce for the food and cleaning industry, there is uncertainty among entrepreneurs as the demand for bags, brushes, tableware, furniture and other products has contracted.
As a result of the home quarantines that were decreed in the countries of the region in March 2020 due to covid-19, the outlook for the plastics industry fluctuates between optimism and uncertainty in market behavior.
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.
When the local economy begins to return to the new normality, as isolation and mobility restrictions are relaxed, it is estimated that the demand for electricity by Honduran households will have decreased by 11%.
Using a demand/income sensitivity model developed by the Trade Intelligence Unit of CentralAmericaData, it is possible to project the variations in demand by Honduran households for different goods and services as the most critical phases of the spread of covid-19 are overcome and the measures restricting mobility in the country are lifted.
New health and hygiene protocols in the establishments and the commitment to attract national tourists in an environment where short trips will be preferred, are some of the trends predicted in the new "normality" that will come after the quarantine period.
Given the quarantines decreed by most governments worldwide, it is anticipated that the habits of tourists will change dramatically in the short and medium term, as the crisis of covid-19 will leave consequences among consumers.
The sharp drop expected in the income of the tourism industry in Central America will be partially explained by the decline in hotel activity and tourist marinas.
The "Information System for the Impact Analysis of Covid-19 on Business", developed by the Trade Intelligence Unit of CentralAmericaData, measures the impact that the crisis will have on companies according to their sector or economic activity, considering various scenarios for the coming months.
In Central America, it is expected that the impact of the covid-19 crisis on the plastic product manufacturing business will be partly explained by the expected drop in sales of bottles and household products.
The "Information System for the Impact Analysis of covid-19 on Business", prepared by the Trade Intelligence Unit of CentralAmericaData, measures the degree of impact that the crisis will have on companies according to their sector or economic activity, during the coming months.
If quarantine and mobility restriction measures are extended by two months, it is expected that by the end of the year the annualized demand for industrial wood products in Central America will have fallen by 10%.
The "Information System for the Impact Analysis of Covid-19 on Business", prepared by the Trade Intelligence Area of CentralAmericaData, measures the degree of impact that the crisis will have on companies according to their sector or economic activity, considering different scenarios for the coming months.
If the quarantine and mobility restriction measures are extended by two months, it is forecast that by the end of the year the annualized demand for electricity generation, transmission and distribution in Central America will have fallen by 4%.
The "Information System for the Impact Analysis of Covid-19 on Business", prepared by the Trade Intelligence Unit of CentralAmericaData, measures the degree of impact that the crisis will have on companies according to their sector or economic activity, considering various scenarios for the coming months.
As the restriction and quarantine measures taken to prevent the spread of covid-19 in the Central American economies are relaxed, cinema ticket sales are forecast to fall by 6%.
Using a demand-income sensitivity model developed by the Trade Intelligence Unit of CentralAmericaData, it is possible to project the variations that household demand for different goods and services will undergo as the most critical phases of the spread of the covid19 are overcome and the measures restricting mobility in the countries of the region are lifted.
If the quarantine and mobility restriction measures are extended by two months, it is forecast that by the end of the year the annualized demand for repair and maintenance services of machinery and industrial equipment in Central America will have fallen by 5%.
The "Information System for the Impact Analysis of Covid-19 on Business", prepared by the Trade Intelligence Unit of CentralAmericaData, measures the degree of impact that the crisis will have on companies according to their sector or economic activity, considering different scenarios for the coming months.