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.
The agile execution of economic stimulus programs, the considerable increase in public debt and the need to accelerate the process of economic reactivation are the lights, shadows and challenges identified a year after Alejandro Giammattei took office as president of Guatemala.
The World Bank has improved economic growth projections for all Central American economies for 2021, with Honduras, El Salvador and Panama having the most promising forecasts.
In June 2020, when the health and economic effects of the pandemic that caused the covid-19 outbreak were beginning to be reported, the World Bank predicted that in 2021 Nicaragua's Gross Domestic Product would decrease by -1.6%, but in a January 2021 publication it projected that the drop would be -0.9%.
In the context of the pandemic, the Costa Rican economy does not show clear signs of recovery, since during November 2020 the Monthly Index of Economic Activity reported an annual fall of 6.2%, a decline that is similar to that reported in October when it was 6.3%.
In November, the contraction persisted, in year-on-year terms, in most economic activities. The most affected are: hotels and restaurants (-52.3%), transportation and storage (-20.6%), construction (-19.7%) and commerce (-12.4%), reported the Central Bank of Costa Rica.
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.
Due to the crisis generated by the covid-19, in May 2020 the economic activity registered its worst decline by falling 31% in year-on-year terms, however, as of June minor decreases were reported and in September the drop was 22%.
The accumulated Monthly Index of Economic Activity (IMAE) from January to September 2020 registered a 18.3% decrease, compared to the same period in 2019, informed the General Comptroller of the Republic.
After seven months of reporting drops in production levels, which were caused by the crisis generated by the covid-19 outbreak, during October the Monthly Index of Economic Activity registered a 1.3% year-on-year variation.
The health emergency led to a severe economic crisis, which began to become evident in March, when the Monthly Index of Economic Activity (IMAE) fell 5% year-on-year.
After the IMAE reported year-on-year variations of -9% and -8%, respectively, in July and August, during September the Costa Rican economy continued to recover from the impact of the health crisis by reporting a 6% drop in production.
The Central Bank of Costa Rica (BCCR) reported that the economy is in the process of recovery, as a result of the process of reopening and gradual lifting of sanitary restrictions, which were imposed following the outbreak of covid-19. However, the upturn so far is not enough to fully recover the loss in production of the previous quarter, so the level of activity is still lower than in the last quarter of 2019.
After dropping in May 2020 due to the outbreak of covid-19, then registering a -11% year-on-year variation, since then the economic activity index has been recovering quickly, reporting a reduction of only 0.3% in September.
The 0.3% decline in the Monthly Index of Economic Activity (IMAE) was influenced by the drop recorded in Accommodation and food service activities, Construction, Trade and vehicle repair, Transportation and storage, as well as by the growth observed in Manufacturing industries; Supply of electricity, water and sanitation services, and, Agriculture, livestock, forestry and fishing.
In the critical context of this year, the resilience of remittances and exports, added to the decline in oil prices, would have somewhat shielded the Guatemalan economy, whose GDP would fall only 2% by the end of 2020.
The programs in response to Covid-19 (Bono Familia, Fondo de Protección al Empleo, Fondo de Crédito para Capital de Trabajo), along with the temporary restructuring of loans by the banking system, are helping to sustain household income and business liquidity, the multilateral agency reported after making its last visit.
According to the Central Bank, this year the Costa Rican economy will contract by 4.5%, an estimate that would be optimistic in the current context of fiscal and economic crisis, uncertainty, distrust and lack of decisions in the transcendental issues facing the country.
The recent results of local production and the new estimates of global economic activity have allowed the Central Bank of Costa Rica (BCCR) to revise its economic growth projections for the country: the economic contraction for 2020 is expected to moderate to 4.5%, from the 5.0% predicted in the 2020-2021 Macroeconomic Program Review of last July. For 2021, an annual increase in production of 2.6% is projected, a figure 0.3 percentage points (p.p.) higher than that also announced in July.
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.
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 IMAE in Honduras registered a -22% year-on-year variation in May of this year, during July and August the contraction of Honduran production was less, reporting falls of 13% and 8%, respectively.
The measures adopted to face the Covid-19 health emergency have had a negative impact on economic activity, reflected in the accumulated variation to August 2020 of the Monthly Index of Economic Activity (IMAE), which shows a 10% contraction in its original series, reported the Central Bank of Honduras (BCH).
During July the IMAE registered -4% year-on-year variation, a drop that is less than those reported in April, May and June, months in which due to the crisis generated by the covid-19, production reported contractions of 10%, 8% and 6%, in that order.
In the seventh month of the year, agricultural activity grew by 9.7% (2.1% in the accumulated January-July), due to increased work and production in the cultivation of coffee, corn, beans, rice, sorghum, and peanuts, among other agricultural products, reported the Central Bank of Nicaragua (BCN).
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