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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Guatemala: Economic activity grows at record-high pace in April
June 14, 2021
Economic activity increased 12.4% year-on-year in April (March: +9.4% yoy).
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Costa Rica: Economic activity growth accelerates at fastest pace in over two decades in April
June 11, 2021
Economic activity gained further traction in April, expanding at a multi-decade high pace of 8.8% in annual terms—albeit partly due to a low base effect—accelerating from March’s 2.5% rise. Looking at the details of the release, April’s upturn was broad-based.
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Guatemala: Inflation remains steady in May
June 8, 2021
Consumer prices increased 0.16% from the previous month in May, picking up from the 0.11% increase logged in April.
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Guatemala: Growth in remittances eases but remains elevated in May
June 8, 2021
Remittances totaled USD 1,236.7 million in May, jumping 47.8% year-on-year (April: +78..% yoy).
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Costa Rica: Inflation inches up in May
June 7, 2021
Consumer prices decreased 0.01% over the previous month in May, swinging from the 0.29% increase logged in April.
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