Central America Economic Forecast

Economic Snapshot for Central America

December 1, 2022

Economic Growth

Economic growth in the region is set to slow notably next year. Household spending will be dented by still-elevated inflation and downbeat consumer sentiment. Meanwhile, fixed investment growth will be weighed on by tighter monetary policy and global economic uncertainty. The region is also vulnerable to a recession in the U.S., although the impact would differ by country.

Inflation Outlook

Regional inflation moderated for the second month running (September: 8.3%; August: 8.6 %). This suggests that inflation has largely peaked in the region; all countries for which data is available registered lower price pressures barring one . While inflation is set to moderate next year, it will remain elevated by recent historical standards.

 

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