By 2017 the Central Bank forecasts inflation of between 2% and 4% and an annual growth rate of 4.1% in gross domestic product in the 2017-18 biennium.
From the report "Macroeconomic Program 2017-2018" by the Central Bank:
For the 2017-2018 biennium, in an expectedcontext of moderate growth in our main trading partners, a gradual return to normal international liquidity and orderedincreases in the international price of basic commodities, the macroeconomic projections include the following:
Fitch foresees returns for Nicaraguan banks, however the result will not be as good for the banking industry in Panama, Guatemala or El Salvador.
From Fitch's report "2017 Outlook: Central American and Dominican Republic Banks"
The 2017 Central American bank rating outlook is stable for 2017, reflecting slight changes in growth and financial performance, according to a new Fitch Ratings report. The evolution of some factors, such as interest rates and private investment, or the emergence of events that could increase reputation risk could alter the banking outlook.Stable Rating Outlook: The ratings of most banks in the region have a stable outlook, reflecting the fact that their credit profile will not undergo significant changes in Fitch's base scenario.Movements in the ratings will be derived mainly from adjustments in ratings of parent banks or sovereign ratings, or of unanticipated events.
According to Fitch Ratings growth in the insurance sector in Central America in 2017 will be driven by the markets of Costa Rica and Nicaragua.
From the report "Outlook 2017: Insurance in Central America" by Fitch Ratings:
Rating Outlook Stable:Fitch Ratings´outlook for insurance ratings in Central America is stable. The agency believes that there is a limited probability of rating adjustments in the next 12 to 18 months, which could lead to significant changes in the risk profile or the weighted support in some cases.
Excess liquidity in the financial system, soaring loans in dollars, a rising fiscal deficit and a less favorable global environment will complicate the path in the rest of the year and in 2017.
The document"Macroeconomic Review Program 2016-2017"by the Central Bank of Costa Rica says that these four elements are the main factors that could adversely affect overall economic performance.
In the first half of the year, with the exception of construction, the other activities have registered increases above the figures observed a year ago, with services, agriculture and manufacturing being particularly noteworthy.
From a report issued by the Board of the Central Bank of Costa Rica:
The Board of the Central Bank of Costa Rica is keeping the monetary policy rate at 1.75%.In compliance with the provisions of the Organic Law, the Board of the Central Bank of Costa Rica carries out monthly analysis of the internal and external macroeconomic situation of the country.Not limited to these factors, the discussions provide the elements that support the adoption of monetary policy measures.The assessment for June was carried out in session 5727-2016 of day 29, during which the Board decided to maintain the level of the monetary policy rate at 1.75% a year.
Estimates of supply, demand, trade and prices of major agricultural commodities across 41 countries in 12 geographical regions.
Summary of the OECD-FAO report, Agricultural Outlook 2016-2025:
The Agricultural Outlook 2016‑2025 is a collaborative effort of OECD and FAO. It brings together the commodity, policy and country expertise of both organisations and input from collaborating member countries to provide an assessment of medium‑term prospects of national, regional and global agricultural commodity markets. The Outlook provides supply, demand, trade and price estimates of major agricultural commodities for 41 countries and 12 geographical regions. The special theme chapter of this year’s edition focusses on the prospects and challenges of the agricultural sector in Sub‑Saharan Africa.
The IMF points to a greater vulnerability in the financial sector because of credit expansion in dollars and on the macroeconomic level because of the inability to reduce the fiscal deficit.
From a press release issued by the IMF:
On May 11, 2016, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation1 with Costa Rica.
Despite the impact that the high cost of energy and social security contributions have had on their competitiveness, medium and large companies anticipate a slight improvement in results this year.
From a statement issued by the Chamber of Industries of Costa Rica:h
Tuesday May 17, 2016. Industrialists expect a year with better performance in investment and increased production compared to last year.
The identification of Grupo Waked in a money laundering network could result in significant changes in the representations of brands marketed in the country.
An article on Prensa.com cites Jorge Garcia Icaza, president of the Chamber of Commerce, Industries and Agriculture of Panama, who emphasized that restraint should excerised when dealing with the case in order to minimize damage which it is estimated could be caused, especially in relation to jobs in the companies under question.
Projections for sectors such as retail, real estate and franchising anticipate a better year for entrepreneurs, provided that new taxes are not approved.
The moderate expectations of entrepreneurs in Costa Rica in recent years took a positive spin at the beginning of 2016. However, the semblance of confidence is fragile, depending on the response of the government, particularly on fiscal issues, said Francisco Llobet, President of the Chamber of Commerce of Costa Rica to Elfinancierocr.com , when referring to the creation of new taxes.
Fitch forecasts growth of 3.5% in the region in 2016, due to increased competition and currency devaluations in some markets.
From a statement issued by Fitch Ratings:
Fitch Ratings - San Salvador - (January 21, 2016): The Outlook for the Insurance Sector in Central America and the Dominican Republic is stable, according to a report by Fitch Ratings.
The lack of new public works projects is putting downward pressure on the growth of the construction sector in Costa Rica, which went from 4.5% in 2015 to only 0.7% being projected for the new year.
The Central Bank has set the inflation target at 3% for 2016-2017. The projection of real GDP growth for 2016 is 4.2% and 4.5% in 2017.
From a statement issued by the Central Bank of Costa Rica:
This program contains an analysis of the macroeconomic situation in 2015 and the objectives, policy measures and macroeconomic projections for the next 24 months.
Fitch Ratings predicts headwinds and higher risks for banks in Central American countries in 2016, resulting in lower credit growth.
From a report by Fitch Ratings Central America:
Headwind: Central American Banking systems face greater risks in 2016. A slowdown in growth of gross domestic product (GDP) in the region and, consequently, lower credit growth is anticipated.
In October 2015 the economy registered a growth of 3.2%, maintaining the recovery trend shown since April.
From a statement issued by the Central Bank of Costa Rica:
In October 2015 the country's production, measured by the cycle trend of the Monthly Economic Activity Index (IMAE) registered an average growth of 2.5% and an annual change of 3.2% (3.5% and 3, 1% in the same period in 2014, respectively).