Partly explained by the decline in business confidence, the International Monetary Fund expects Costa Rica's economy to grow 3.3% each year in 2018 and 2019.
The uncertainty in the economy is mainly due to the government's growing debt and fiscal deficit, as well as doubts about the future of the tax reform that was already approved in the first debate by the Legislative Assembly, but now awaits the approval of the Constitutional Chamber.
The IMF projected a 3.2% growth in GDP for Guatemala in April, but in its latest review the institution reduced the figure to 2.8%.
As the International Monetary Fund (IMF), the Bank of Guatemala also reduced the projected growth of the Gross Domestic Product from 3.8% to between 2.8% and 3.2%.
The 3.8% YoY growth reported during August in Costa Rica is mainly explained by the construction sector, which has been on an upward trend since March.
The trend series of the Monthly Economic Activity Index (IMAE) presented an interannual growth of 3.8% in August 2018, higher by 0.1 percentage points (p.p.) than the interannual variation rate of the previous month. The average rate for January-August was 3.4%, while the accumulated variation of the last twelve months showed a growth of 3.2%, informed the Central Bank of Costa Rica.
Influenced by the performance of wholesale and retail trade, economic activity in Guatemala reported an inter-annual increase of 3.2% in August.
In September, performance was influenced by the positive result mainly experienced by the following economic activities: Wholesale and retail trade; Manufacturing industries; Private services; Financial intermediation, insurance and auxiliary activities; and Transportation, storage and communications.
New World Bank projections estimate that because of Nicaragua's political crisis, the country's GDP will fall 4% this year and 1% in 2019.
According to the expectations of the international organization, Nicaragua will be the only economy that will decrease in Central America, because of the political and social crisis in which the country is involved since last April, it is expected that the Gross Domestic Product (GDP) will decrease 3.8% in 2018 compared to 2017.
"Despite temporarily slowing in 2018, the panamanian economy is poised for a rebound in the near term and will remain among the most dynamic in Latin America."
What the International Monetary Fund (IMF) said about the slowdown suffered by Panama's economy is not a surprise, considering what the indicators have been showing over the past few months. One of the best examples is the construction sector, which between January and August reported a reduction of 40% compared to the same period in 2017. Sales of new vehicles, a good thermometer of consumption of Panamanians, have not managed to rebound from last year, while foreign direct investment, which in previous years did not stop growing, reported a decline of 13% in the first six months.
Explained mainly by the private consumption expansion, the Gross Domestic Product reported a year-on-year increase of 3% in the first half of the year.
Regarding growth in the second quarter of the year, the Central Reserve Bank (BCR) reported that the production process informed between April and June this year confirms the greatest boom in economic activity announced during the first quarter, so it increased by one-tenth the growth projection for 2018, with an expected rate of 2.6%.
Excessive regulation, increased tax charges and geopolitical uncertainty are the main risks to business growth in the region for Central American CEOs.
PricewaterhouseCoopers (PwC) conducted the Global CEO Survey in the Central American region, in which a group of business executives from Central American countries and the Dominican Republic shared their opinions about their economic expectations.
As a result of an increase in investment in new constructions and in the final consumption of households, GDP increased 3.3% year-on-year in the second quarter of the year.
During the second quarter of 2018, the economic activity volume, measured with the trend of the Gross Domestic Product (GDP) cycle, increased at an annualized rate of 3.6%, mainly as a result of an increase in investment in new buildings and final consumption of households. In the year-on-year comparison, production registered a growth of 3.3%, according to the Central Bank of Costa Rica.
Arguing that the behavior of the main indicators of the local economy are consistent with those expected, Banco de Guatemala has decided to maintain the monetary policy rate at 2.75%.
Influenced in part by the performance of the transportation and services sectors, economic activity in Guatemala reported a year-on-year growth of 3.4% in July.
The behavior in the seventh month of the year was influenced by growth shown by the following economic activities: Transportation, storage and communications, Wholesale and retail trade, Private services and the Manufacturing industries.
Following the reductions in the index of economic activity that were reported in May and June, in July the indicator continued to fall, reporting a 4% drop compared to the same month in 2017.
The IMAE registered a decrease of 4.2% compared to July 2017, with an average annual growth of 0.7 percent and an accumulated variation of -1.7 percent.The underlying variation, measured with the trend cycle series, registered a year-on-year decrease of 4.6 percent.The seasonally adjusted IMAE series grew by 7.7% compared to June 2018, the Central Bank of Nicaragua reported.
After economic activity in Panama registered an interannual increase of 3% in June, in July an increase of almost 2% was reported with respect to the same month in 2017.
From a statement issued by the General Comptroller of the Republic:
The Monthly Index of Economic Activity (IMAE) in the Republic, for January-July 2018, grew by 3.04%, compared to the same period in 2017.The interannual monthly variation in July 2018 was 1.98%, compared to the same month last year.
During the second quarter of 2018 the constant Gross Domestic Product totaled $10,084 million, 3% more than was reported in the same period in 2017.
The activities related to the domestic economy that performed positively in this quarter were: transport and communications, financial intermediation, trade, government services, health and education.On the other hand, construction activities, mines and quarries, hotels and restaurants, other community and personal activities presented negative behavior,informed the Comptroller General of the Republic.
From July of this year, the Monthly Index of Economic Activity recorded a year-on-year variation of 3.7%, which is far from the 5.1% reported in the same month in 2017.
The report by the Central Bank of Honduras states that "...Because of its contribution to the Monthly Index of global Economic Activity, the group that stands out is Financial Intermediation, Insurance and Pension Funds having contributed the most, followed by: the Manufacturing Industry; Commerce; Mail and Telecommunications; Agriculture, forestry and fishing; Electricity and Water; Transportation and Storage; Building; and, Hotels and Restaurants."
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