Despite the impact of the crisis caused by the covid-19 outbreak, between January and June 2020, income generated by net premium sales in El Salvador increased by 2%.
Data provided by directors of the Salvadoran Association of Insurance Companies (ASES), highlights that in the first half of the year net premiums were sold in the country for $345 million, an amount that is 2.3% higher than that reported for the same period in 2019.
In this scenario of economic crisis, falling tax revenues and the need to finance recovery programs, in Guatemala and Costa Rica it is already proposed to increase current taxes and create new ones.
Guatemalan authorities are already beginning to discuss the fiscal policy they will apply in 2021, when the economy will have to face the effects of the economic crisis generated by the covid-19 outbreak.
After the unemployment rate in the United States fell from 15% to 8% between April and August, it became evident that at the beginning of the crisis the capacity of recovery that the North American country could develop was underestimated and it is expected that this behavior could boost the economic activity in Central America.
During the first half of 2020, when the first cases of covid-19 began to be reported in the region, forecasts noted that the recovery of economic activity would be excessively slow, due to a significant drop in consumption globally.
After reporting in June a 7% year-on-year variation, in July the monthly index of economic activity continued to fall, registering an 8% drop with respect to the same month in 2019, a decrease that is explained by the economic crisis affecting the country.
The lower activity, which is due to the impact that the pandemic has had in Costa Rica and around the world, is seen in the five major economic activities (agriculture, manufacturing, construction, trade and services) that make up the monthly index of economic activity (IMAE).
As a result of the crisis, in Costa Rica in June of this year the rate of availability of premises in shopping centers climbed to 11.8%, a proportion of concern because a healthy level should not exceed 10%.
Although the sector keeps its operations alive thanks to the packaging they produce for the food and cleaning industry, there is uncertainty among entrepreneurs as the demand for bags, brushes, tableware, furniture and other products has contracted.
As a result of the home quarantines that were decreed in the countries of the region in March 2020 due to covid-19, the outlook for the plastics industry fluctuates between optimism and uncertainty in market behavior.
After the IMAE in Guatemala registered a -11% year-on-year variation in May of this year, during June and July the production contractions were lower, reporting falls of 7% and 5%, in that order.
The Bank of Guatemala reported that in the current economic crisis that emerged due to the spread of covid-19, the activities that have most boosted the drop in production are trade, tourism and transportation.
In the first eight months of this year, transactions registered on the Nicaraguan Stock Exchange totaled $421 million, 122% more than reported for the same period in 2019.
According to figures from the Nicaraguan Stock Exchange (BDVN), between January and August 2019 and the same period in 2020, the amount of transactions in the stock market increased by $231 million, from $190 million to $421 million.
After 20 years of operation, Modas B.I. Apparel, a company specialized in the manufacture of clothing, decided to close its doors due to the economic crisis caused by the outbreak of covid-19.
The company operated an industrial plant that employed 800 workers and was located at Kilometer 8 of the Atlantic Highway, in the jurisdiction of the Department of Guatemala.
After the reopening phases that were supposed to be applied in El Salvador were declared unconstitutional and the restrictions to economic activities were removed, businessmen receive the news with optimism, but fear that some businesses have closed down because of the crisis.
Since March, when the first cases of covid-19 began to be registered in the country, the administration headed by Nayib Bukele decided to subject the country to a strict home quarantine.
Against the backdrop of an imbalance in trade and restrictions decreed in several markets around the world, Central American companies in the garment business are operating and generating export earnings at levels that merely allow them to subsist.
Data from the Office of Textiles and Apparel, of the U.S.
After the industrial activity registered in May one of the lowest levels of the last years, it is expected that the sector will close 2020 in negative variations, but more moderate than those reported in the first half of the year.
The Index of Economic Activity of the Chamber of Industry of Guatemala, which is calculated by Central American Business Intelligence (Cabi), states that during May and in the context of the economic crisis resulting from the outbreak of covid-19, fell by about 10% when compared to the same period in 2019.
Speeding up the repayment of the tax credit, repealing the Solidarity Tax, approving the Leasing Law, reforming the Banking Law and the Free Zone Law, is part of what Guatemalan businessmen are proposing to reactivate the economy in this context of crisis.
At present, Guatemala is immersed in a severe economic crisis, which was generated by the restrictions to productive activities that were decreed due to the outbreak of covid-19.
After in May this year and in the context of the economic crisis, the IMAE in Guatemala registered a -12% year-on-year variation, during June 2020 the contraction of production was lower, reporting a 9% fall compared to the same month in 2019.
In the current economic crisis resulting from the spread of covid-19, the activities that have most boosted the drop in production are trade, tourism and transport, reported the Bank of Guatemala.
Due to the drop in economic activity generated by the covid-19 crisis, a 7.9% reduction in domestic electricity consumption was reported in the region between March and June 2020, when compared to the levels of the same period in 2019.
Regarding the reduction of internal consumption of electricity in the countries from March to June 2020, we have that Guatemala had a drop in its demand of 239 GWh (Gigawatt hours), which corresponds to 6.6% compared to the consumption of electricity in 2019, in the case of El Salvador with a reduction of 335 GWh, equivalent to 15.4%, says a report from the Regional Operating Agency (EOR).
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