Economic Snapshot for Central America
August 7, 2019
A recovery in Puerto Rico and a likely uptick in Panama will drive an acceleration in regional growth this year. That said, the rest of the region is seen stable or slowing as softer U.S. growth dampens remittances, exports and tourism. The recession in Nicaragua, exposure to natural disasters and uncertainty over the future of the TPS program in the U.S. are risks to the outlook.
Central America Monetary & Financial Sector News
Regional inflation dropped to 8.2% in June, the lowest reading since February, partly reflecting reduced energy price pressures. Inflation fell notably in Brazil also on a positive base effect from last year’s truckers strike, while Argentina saw the first drop in inflation this year as the ultra-tight monetary stance bears fruit. Regional inflation is seen falling by year-end.
The Central Banks of the Dominican Republic and Costa Rica both slashed their policy rates again in July. Low inflation and waning economic momentum created room for monetary easing. Looking ahead, the Fed’s rate cut in late July should provide scope for further unwinding if needed to support growth, and the regional average interest rate is forecast to end 2019 below its 2018 level.
Regional currencies had mixed performances in H1; the colón and quetzal gained ground, while the Dominican peso gradually depreciated. Most currencies are projected to lose value by year-end, due to instability in countries like Nicaragua, weak external positions, and as concerns over global growth weigh on investor appetite for emerging-market assets.
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5 years of Central America economic forecasts for more than 30 economic indicators.
Central America Economic News
Guatemala: Inflation eases in July
August 19, 2019
Consumer prices fell 0.06% over the prior month in July, contrasting the 0.83% increase in June.
Panama: Consumer prices fall at weaker pace in annual terms in July
August 14, 2019
Consumer prices rose 0.2% over the previous month in July, contrasting the 0.3% decline registered in June.
Guatemala: Economic activity moderates in June
August 14, 2019
Economic activity slowed to 3.1% in annual terms in June, down from May’s revised 3.5% growth (previously reported: +3.3% year-on-year).
Guatemala: Economic activity quickens in May
July 31, 2019
Economic activity accelerated to 3.3% year-on-year in May from a revised 2.3% increase in April (previously reported: +2.8% year-on-year).
Guatemala: Inflation climbs in June
July 31, 2019
Consumer prices rose 0.83% month-on-month in June, up from the 0.26% increase in May.
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