Central America and Caribbean Economic Outlook
This year, regional GDP growth will decelerate notably from 2022, in no small part due to a more challenging base of comparison. Domestic demand will be restrained by still-high inflation and interest rates, while foreign demand will ease due to weaker global momentum. The El Niño weather pattern, political instability and a weaker-than-expected U.S. labor market are risks.
Central America and Caribbean Inflation
In July, regional inflation eased to 3.3% (June: 3.6%), with price pressures rising only in Jamaica and Panama. Inflation will ease markedly from last year in 2023 amid high interest rates, slower activity and a strong base effect. That said, it will remain above most central bank targets. Extreme weather events are an upside risk.
This chart displays Economic Growth (GDP, ann. var. %) for Central America and Caribbean from 2010 to 2020.
| 2018 | 2019 | 2020 | 2021 | 2022 | |
|---|---|---|---|---|---|
| GDP per capita (USD) | 5,524 | 5,649 | 5,221 | 5,764 | - |
| Economic Growth (GDP, ann. var. %) | 1.9 | 2.2 | -7.4 | 7.5 | - |
| Private Consumption (ann. var. %) | 2.6 | 3.2 | - | - | - |
| Fixed Investment (ann. var. %) | 15.5 | 0.8 | - | - | - |
| Unemployment (% of active population, aop) | 7.6 | 7.7 | 11.2 | 8.9 | - |
| Fiscal Balance (% of GDP) | -3.0 | -3.1 | -7.5 | -3.9 | - |
| Inflation (CPI, ann. var. %, aop) | 2.8 | 5.3 | 2.1 | 3.9 | 7.6 |
| Policy Rate (%, eop) | 4.49 | 3.57 | 2.06 | 2.46 | 6.36 |
| Exchange Rate (BAM per USD, eop) | 150 | 145 | 155 | 153 | 141 |
| Current Account Balance (% of GDP) | -1.7 | -0.4 | - | - | - |
| Merchandise Exports (USD bn) | 77.5 | 76.3 | 67.6 | 90.3 | - |
| Merchandise Imports (USD bn) | 119.8 | 116.7 | 96.5 | 132.7 | - |
| International Reserves (USD bn) | 51.9 | 59.3 | 71.6 | 77.9 | 77.1 |
| External Debt (% of GDP) | 65.5 | 65.9 | 74.0 | - | - |