Economic Snapshot for Central America
September 22, 2020
The regional economy is forecast to shrink this year, hit by fallout from Covid-19
The regional economy will contract notably this year as the pandemic and associated containment measures wreak havoc on domestic and foreign demand, weighing heavily on trade, tourism and activity. Consequently, unemployment is set to increase while incomes are expected to fall, denting private consumption. Fiscal stimulus should cushion the blow somewhat.
Central America Monetary & Financial Sector News
Price pressures intensified in August, with inflation rising to 1.9% from 1.6% in July. Inflation gained steam in the Dominican Republic, Guatemala and Honduras. Meanwhile, deflationary pressures in El Salvador increased. This year, price pressures should ease compared to last year as the Covid-19 pandemic and still-low oil prices weigh on domestic demand.
Central bank action was muted in recent weeks. However, the Central Bank of the Dominican Republic opted to lower its policy rate in late August, aiming to stimulate the economy in the face of the pandemic. Going forward, monetary policy in the region is expected to remain loose as central banks aim to soften the blow from Covid-19.
Regional currencies had a mixed run against the USD in recent weeks. The Guatemalan quetzal lost some ground, the Costa Rican colón and the Dominican peso remained broadly stable, and the Honduran lempira appreciated. Looking ahead, regional currencies are expected to depreciate against the greenback over the year due to lingering uncertainty and persistent twin deficits.
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5 years of Central America economic forecasts for more than 30 economic indicators.
Central America Economic News
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Costa Rica: Contraction in economic activity eases slightly in September
November 12, 2020
Economic activity decreased 7.1% in year-on-year terms in September, following the record 7.3% fall logged in June–August.
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Guatemala: Inflation hits over two-year high in October
November 11, 2020
Consumer prices increased 1.06% in October over the previous month, accelerating from the 0.16% rise recorded in September.
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Costa Rica: Inflation picks up pace in October
November 9, 2020
Consumer prices increased 0.08% over the previous month in October, down from September’s 0.27% rise.
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Guatemala: Growth in remittances ebbs in October
November 9, 2020
Remittances totaled USD 1,133 million in October, representing a 13.3% year-on-year jump, which follows September’s 17.8% year-on-year surge.
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Guatemala: Economic activity posts softest contraction since February in September
November 6, 2020
Economic activity declined 0.3% in year-on-year terms in September, following August's 1.5% decrease.
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