Given the economic crisis generated by the covid-19 outbreak, nine out of ten companies operating locally reduced their revenues and one out of three made temporary closures.
Between May and August 2020, a COVID-19 section was included in the Directory of Businesses and Establishments (DEE) as part of the update, in order for businesses to indicate what the main effects of the pandemic were. It was confirmed that 94% were affected by Covid-19, where 91% indicated as main consequence the reduction of income, informed the National Institute of Statistics and Census (INEC).
The business sector opposes the bill that intends to stimulate the economy and local tourism, through the establishment of mandatory rest days and salary surcharges on the days of national events.
This is Bill 487, which is called "Adopting a temporary regime of economic, cultural and national tourism stimulus, through the establishment of mandatory rest days and salary surcharges on national event days", which was presented to the Panamanian Assembly on September 28, 2020.
At the end of last year, the Monthly Index of Economic Activity reported a -8.5% year-on-year variation, a drop that is explained by the negative effects generated by the outbreak of covid-19 and tropical storms Iota and Eta.
The national production of goods and services in terms of volume, showed a contraction in the accumulated variation rate of 8.5% (increase of 3.1% in 2019), mainly explained by the negative effects of the Covid-19 pandemic on economic activity and demand, added to the impact of tropical storms Eta and Iota on agricultural crops, some industries and productive infrastructure, mainly in the northern part of the country, says an official report.
In order to reactivate the Panamanian economy that has been damaged by the outbreak of covid-19, the Ministry of Economy and Finance will present to the National Assembly a bill to extend the tax amnesty and approve new tax relief measures.
The Cabinet Council, led by President Laurentino Cortizo Cohen, authorized, today, the Minister of Economy and Finance, Hector Alexander to present to the National Assembly, the bill extending the tax amnesty, as well as new tax relief measures with a view to reactivate the national economy, explains an official document.
In December 2020, the Monthly Index of Economic Activity reported a year-on-year variation of -5.1%, a drop that is explained by the restrictions imposed due to the covid-19 outbreak.
Since the calculation of the Monthly Index of Economic Activity (IMAE) series began in 1991, the average annual gross production, measured by the IMAE, has only fallen on two occasions, specifically in 2009 and 2020. Both cases coincide with world crises, but the impact has been much more severe for Costa Rica in the case of 2020, according to an official report.
As a result of the crisis caused by the covid-19 outbreak, during the second quarter of 2020 the unemployment rate at national level rose to 24%, for the period from July to September it decreased to 22% and in the last three months of the year it fell to 20%.
Regarding the unemployed population, for the IV Quarter of 2020 it was estimated at 488 thousand people, of these 240 thousand are men and 248 thousand women, the unemployed population increased by 178 thousand people on a year-on-year basis, 97 thousand men and 81 thousand women, informed the National Institute of Statistics and Census (INEC).
Regarding what is expected economically for 2021, in Nicaragua, El Salvador, Panama and Honduras there is more optimism among consumers, while in Guatemala and Costa Rica the percentage of people who believe that the situation will improve this year is lower.
According to the survey conducted by Kantar to measure the perception of households in Central America, at regional level 12% of consumers consulted believe that the economic situation in their country will improve during 2021, 23% expect it to be the same and 65% predict that it will be worse.
In order to mitigate the spread of covid-19, as of January 26, shopping centers and malls, supermarkets, convenience stores and neighborhood stores, will be allowed to carry out their activities until 7:00 pm.
The January 26 edition of the Diario de Centroamerica published the Ministerial Agreement 08-2021 of the Ministry of Public Health, which details the restrictions imposed, which aim to mitigate the escalation of the number of cases of covid-19.
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.
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%.
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%.
After restrictions were imposed on people's mobility during the holiday season to stop the spread of covid-19, Panamanian authorities reported that as of January 14 there will be a return to the process of "gradual and asymmetric reopening.
In a press conference, the Minister of Health, Luis Francisco Sucre, informed that due to the fact that a balance was achieved in the incidence of covid-19 cases, it was decided to lift the quarantine that had been in place since the beginning of the year and as of January 14 the curfew for the entire country will be from 9:00 p.m. until 4:00 a.m. the following day.
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.
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