Up to June of this year, economic activity in the country grew by 2.5%, a year-on-year variation that is lower than the 2.7% recorded in May.
Domestic production of goods and services grew 2.5% in June 2019, 0.9% lower than the rate recorded in the same period of the previous year (3.4%). On the other hand, the cycle trend series showed a year-on-year increase of 1.9% (3.9% in the same month of 2018), said the Central Bank of Honduras.
Faced with the threat of a global economic slowdown and the possibility of the U.S. entering recession next year, businessmen in the region argue that to mitigate possible adverse effects, it is key to diversify export destinations.
Market analysts assure that the slowdown in U.S. economic activity is already a reality, and that what is still not clear, is the possibility that the economy will go into recession next year. The recent reversal of the U.S. bond curve, which historically has been the signal that warns of a recession in the short term, may not mean the same on this time, say some U.S. brokerage firms.
In Honduras, the Central Bank reduced the economic growth projection by the end of 2019 from 3.3% to 3.4%.
The main indicators of high-frequency economic conditions, such as the Monthly Economic Activity Index (IMAE), indicate a moderation in economic activity in relation to that observed in previous years, is one of the arguments of the Central Bank to review economic growth downwards.
In Guatemala, the Economic Activity Index registered year-on-year growth of 3.1% in June, explained in part by the variations of Private Services and Manufacturing Industries.
According to the report of the Banco de Guatemala the economic activity measured by the estimation of the IMAE, reported a deceleration in June 2019, since it registered a 3.1% growth rate, increase that is lower to the variation of 3.5% reported in May of this year.
During the second quarter of the year in the Dominican Republic, the Business Climate Index decreased 4% compared to what was reported from January to March 2019.
The Business Climate Index dropped from 64.5 in January-March 2019 to 61.7 in April-June 2019. This decrease was because of a drop in the opinion of businessmen in the Dominican economy, in the branch, climate for investment and in their company, explains the report of the Association of Industries of the Dominican Republic (AIRD).
Between January and July 2019, accumulated inflation of 1.64% is reported, which is partly explained by the positive variation in the prices of Food and Non-Alcoholic Beverages.
The consumer price index (CPI) registered a 0.47% variation in July with respect to June 2019, placing the accumulated inflation of the January-July 2019 period at 1.64%. With this result, annualized inflation measured from July 2018 to July 2019 stood at 1.40%, reported the Central Bank of the Dominican Republic (BCRD).
While in June the production of special regime companies increased 10% with respect to the same month in 2018, companies operating outside those regimes grew just 0.3%.
The Central Bank of Costa Rica (BCCR) reported that the production of special regimes (SR) companies grew 10.2% in June compared to the same month last year, as a result of increased external demand for medical implements, computer and business services.
Food and Non-Alcoholic Beverages was the expenditure item that most contributed to the 4.7% year-on-year variation reported during the seventh month of the year.
From the Central Bank of Honduras report:
In July 2019, the monthly variation of the Consumer Price Index (CPI) was 0.27%, lower than the observed twelve months ago (0.38%); the monthly result is mainly due to the increase in the prices of some foods, personal care items and medicines.
During July in Costa Rica, the Consumer Price Index reported a 2.9% year-on-year variation, a rise that is partly explained by the behavior of food and non-alcoholic beverage prices.
Of the 315 goods and services that make up the consumption basket, 61% increased in price, 35% decreased in price and 4% showed no variation, reported the National Institute of Statistics and Censuses.
In Costa Rica, the Central Bank predicted that confidence would again prevail among businessmen and consumers once the tax reform was approved, but that has not been the case.
In December 2018, after a year of proceedings in Congress and after having been reviewed in the constitutional instance, was approved by the Assembly of the country the file that corresponded to the Law of Strengthening Public Finances.
During the first seven months of 2019, family remittances to Guatemala totaled $5.875 million, 13% more than in the same period in 2018.
According to the most recent figures from the Bank of Guatemala, in July 2019 the country received $948 million in remittances, 16% more than the $818 million recorded in the same month in 2018.
Between June and July of this year, the inflationary rhythm in Guatemala decreased from 4.8% to 4.4%, mainly because of the variations in the prices of alcoholic beverages and food.
The most important inflation levels in July 2019 are as follows: -0.06% monthly inflation, 4.37% inflationary rhythm and 3.11% accumulated inflation, according to the National Statistics Institute (INE).
The proportion of public debt to GDP is about to reach 60%, the maximum limit allowed by law, which will force the government to restrict capital spending in the coming years, in order to avoid further deterioration of public finances.
The Treasury authorities indicated that at the end of 2019 the country's public debt will represent 59% of production, adverse scenario for investment, because according to the fiscal rule, when the proportion reaches 60% will affect capital spending, since the government must begin to contain expenditures.
After registering a 20% year-on-year drop in June, in July the Confidence in Economic Activity Index in Guatemala showed a 7% variation.
The report of the Bank of Guatemala states that "... The Panel forecasts an inflationary rhythm of 4.72% for July, of 4.70% for August and of 4.72% for September 2019.
In Costa Rica, it is expected that the downward trend that has been showing the exchange rate since February will intensify in the coming months, when the $3.580 million begins to enter as a result of the issuance of Eurobonds and loans granted by external entities.
According to data from the Central Bank of Costa Rica (BCCR), between the beginning of February and July 30 of this year, there has been a fall of up to 44 colones per dollar, reporting a drop in the average rate in the wholesale market Monex from ¢613.87 to ¢570.13.
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