Central America Economic Forecast

Economic Snapshot for Central America

October 13, 2021

GDP forecast to expand in 2021

After recovering solidly this year, regional economic growth is set to ease next year as domestic and foreign demand stabilize. Private consumption should remain an important driver of growth, benefiting from tighter regional labor markets and robust remittance inflows. However, uncertainty over the pandemic and the unwinding of fiscal support measures cloud the outlook.

Inflation to ease in 2022

Regional inflation was stable at July’s 4.3% in August. Higher prices for commodities, particularly energy, and supply chain disruptions have pushed up price pressures recently. Inflation is forecast to end this year below its current level, before easing further next year. Depreciating currencies and firming economic activity pose upside risks.

 
 

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