Central America Economic Forecast

Economic Snapshot for Central America

September 15, 2021

GDP forecast to expand in 2021

The regional economy is set to return to growth this year as the impact of the pandemic fades amid the ongoing vaccine rollout and the lifting of  lockdown measures. That said, a recent rise in cases in some countries could prolong the health crisis, clouding the outlook. Moreover, weakened labor markets and income levels will weigh on household consumption.

Inflation to trend higher in 2021

Regional inflation inched down to 4.0% in July from 4.1% in June. Stronger price pressures in El Salvador, Nicaragua, Panama and Puerto Rico were somewhat offset by easing inflation in Costa Rica, the Dominican Republic and Honduras. Inflation is forecast to trend higher this year than in 2020 amid higher oil prices, depreciating currencies and firming economic activity.


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