Central America Economic Forecast

Economic Snapshot for Central America

June 17, 2020

The regional economy is forecast to shrink this year, hit by fallout from Covid-19

The pandemic is weighing heavily on trade, tourism and remittances inflows, while domestic containment measures are undermining household consumption and fixed investment.

Central America Monetary & Financial Sector News

Preliminary data showed that inflation ticked up from May’s 0.8% to 0.9% in June on stronger price pressures in Guatemala and Honduras, offsetting the effect of persistent deflation in El Salvador. This year, inflation is expected to remain muted amid weakened aggregate demand and low oil prices.

While the central banks of Costa Rica and Guatemala reduced their policy rates recently, other regional central banks stood pat on the heels of previous easing. Looking ahead, regional monetary policy authorities are expected to maintain a loose stance to mitigate the economic impact of Covid-19.

Regional currencies had a mixed run against the USD recently. While the Honduran lempira gained ground, the Costa Rican colón and the Dominican Republic’s peso depreciated; Guatemala’s quetzal, meanwhile, was virtually unchanged. This year, the regional exchange rate is expected to depreciate amid risk aversion and persistent twin deficits.

Sample Report

5 years of Central America economic forecasts for more than 30 economic indicators.

Download

Central America Economic News

Request a Trial

Start working with the reports used by the world’s major financial institutions, multinational enterprises & government agencies now. Click on the button below to get started.

Sign Up

Search form