Despite a severe economic crisis, Costa Rican authorities have approved the imposition of a 1% VAT on several foodstuffs in the basic food basket, and 4% on certain tourist activities and construction services.
Before the emergence of the pandemic, the Costa Rican economy was already in a difficult state, and the impact of the covid-19 outbreak ended up hitting it in the worst way, which is evident in the performance of productive activity.
After almost 100 days of restrictions on the mobility of people and the closure of some productive activities, the Guatemalan private sector is asking the authorities to start evaluating the gradual opening of businesses under strict protocols.
Due to the outbreak of covid-19, the authorities decreed the closure of several economic activities since mid-March, and up to date restrictions to the operation of some sectors are still in place.
In order to de-escalate the confinement and reactivate productive activities, the Guatemalan authorities plan to begin in the regions where the covid-19 curve starts to fall, without having to wait for this situation to arise throughout the country.
Since mid-March, Guatemala has been under house quarantine, due to the covid-19 outbreak that so far affects all departments of the country. Although as of June 21, the number of people infected and killed by the virus continues to rise, business owners and authorities are beginning to evaluate possible scenarios to reactivate the activities they are not allowed to operate.
As a result of non-compliance with biosecurity protocols, the increase in the number of cases and the saturation of hospital capacity, Phase I of the Intelligent Opening Process was suspended.
On June 8, business activities began to restart. However, the increase in the number of people infected forced the authorities to back off and cancel the start of Phase I, a decision that was communicated on June 21.
Arguing that the country is at risk of taking the route of an exponential covid-19 infection curve, the government suspended phase 3 of the commercial reopening and decreed new vehicle restrictions for June 20-21.
Due to the increase in cases announced on June 19 at a press conference, the government decided to tighten health measures issued by the Ministry of Health to contain the spread of the disease, thus postponing the third phase of reopening announced on June 18.
In the context of the health and economic crisis in the country, some 54% of the country's companies have suspended work due to lack of market demand.
The results of a survey carried out by the Superior Council of Private Enterprise (COSEP) and the International Labor Organization (ILO), indicate that in this scenario of economic contraction, in the Nicaraguan market 33% of the companies surveyed have had to lay off workers and there are 40% who are also thinking of laying off workers.
Full opening by regions and not by blocks, reactivation of construction and the establishment of an emergency financial assistance plan are some of the proposals of the Panamanian business sector to face the economic and health crisis.
For the Panamanian Association of Business Executives (Apede) the confinement measures do not manage to stop the advance of covid-19 transmission, but they do cause negative effects on employment levels in the country.
Businessmen and authorities agreed that from June 16 will begin the reactivation of productive activities, and it is estimated that within 100 days the economy will be functioning at 100%.
After almost three months of restrictions to the mobility of people and the suspension of productive activities, derived from the outbreak of covid-19 in the country, agreements were reached at the Economic Reactivation Table.
The World Bank projects that the Central American economy will contract by 3.6% this year, due to restrictions on movement, a decline in remittances and tourism, and a drop in agricultural prices.
The sudden and widespread impact of the coronavirus pandemic and the measures taken to contain it have caused a drastic contraction in the global economy, which, according to World Bank forecasts, will shrink by 5.2% this year, the bank reported on June 8.
Structural changes in world trade, consumer preference for living on the outskirts of cities and a growing demand for technological equipment to be able to work from home are some of the turns economies will experience in the new reality.
Most companies globally have been focused on understanding the new business environment, which derives from the change in the ways people relate to each other as a result of the covid-19 outbreak.
In the context of the tense diplomatic and commercial relationship between the two world powers, Central American countries could have the opportunity to attract new investments, as it is estimated that some American companies would need to migrate their operations to the American continent.
As a result of the tension between the two nations, Mauricio Claver-Carone, an advisor to President Trump, believes that U.S. capital, which currently generates thousands of jobs in China, will turn south of the U.S. borders.
The Ministerial Agreement was published in the Diario de Centroamerica, which specifies the four phases to be applied for the de-escalation of containment measures for the reactivation of economic activity in the country.
According to the official document, Phase 0, which is called "De-escalation Preparation", will provide relaxation of the confinement measures that will allow relief to citizens and workplaces, allowing mobility outside the home.
After the Guatemalan government carried out total closures of economic activity for three consecutive weekends in the context of the covid-19 outbreak, the president announced that there would be no total suspension of operations for the week of June 1-7.
Another change is that the curfew will now be 18 hours to 5 am next day, reported the night of May 31 President Alejandro Giammattei on national television.
In Panama, the Ministry of Labor has again extended for 30 days the provision that allows companies in the country to suspend the contracts of their employees.
By Executive Decree No.97 of May 29, 2020 and in the scenario of the crisis caused by covid-19, the temporary suspension of the effects of labor contracts is extended for the second time.
Between February and May of this year the Consumer Confidence Index registered a 40% drop, which was caused by the health and economic crisis resulting from the covid-19 outbreak.
According to the Consumer Confidence survey conducted by the University of Costa Rica, between August and November 2019 the Consumer Confidence Index (CCI) rose from 28.5 to 32.3, however, by May of this year it had fallen to 19.7.
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