Economic Snapshot for Central America
January 20, 2021
Regional growth is seen rising this year from last. A recovery in Puerto Rico and a likely acceleration in Panama should more than offset slower momentum in the rest of the region. Political uncertainty in Nicaragua, exposure to natural disasters and uncertainty over the future of the TPS program in the U.S. are downside risks to the outlook.
Central America Monetary & Financial Sector News
Regional inflation dipped to 2.2% in August from 2.3% in July according to preliminary data. More accommodative monetary policies and a broad weakening in currencies should push up regional inflation moving forward, although softer economic activity in many countries will limit the uptick. Fluctuating oil prices remain a key risk to the outlook.
The central banks of the Dominican Republic and Jamaica both cut their policy rates again in August, as part of efforts to support inflation and economic activity. Looking ahead, under-control price pressures and likely further easing from the Fed could provide scope for more rate cuts by regional central banks.
Major regional currencies not tied to the dollar have lost some ground over the last month against a backdrop of rising international uncertainty. Going forward, most currencies are likely to continue to depreciate due to a mixture of fragile external positions, political instability and lower domestic interest rates.
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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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Dominican Republic: Inflation hits highest level since July 2013 in December
January 14, 2021
Consumer prices rose 0.48% over the previous month in December, which was below the 0.60% rise recorded in November.
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Guatemala: GDP slides at softer rate in Q3
January 14, 2021
GDP declined at a markedly slower pace in the third quarter, decreasing 1.8% on an annual basis (Q2: -9.6% year-on-year). The upturn reflected a broad-based improvement in private consumption, public spending, fixed investment and exports.
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Panama: Consumer prices slide at a steeper rate on an annual basis in July
January 13, 2021
Consumer prices were down 0.40% from the previous month in July, contrasting June's 0.52% increase.
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Costa Rica: Inflation climbs in December
January 12, 2021
Consumer prices increased over the previous month in December, clocking in a 0.53% rise, notably up from November’s flat reading and marking a 17-month high.
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Costa Rica: Contraction in economic activity eases further in November
January 12, 2021
Economic activity continued to shrink in November, although at 6.5% year-on-year it is the mildest contraction since March, following October’s 6.6% drop.
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