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Cheerful and nice advances in the economic activity in Central America

Updated: Dec 19, 2021

The World Bank predicts that by the end of this year Panama and the Dominican Republic will be the economies of the region that will grow the most, and the countries that will report the lowest increases in their production will be Costa Rica and Nicaragua.

After the region's economies were considerably affected in 2020 by the sanitary crisis generated by the Covid-19 outbreak, the outlook of international organizations for 2021 is encouraging.

In March 2021, the Monthly Index of Economic Activity reported a year-on-year variation of 6.5%, a rise that is largely explained by the dynamism of mining and quarrying, manufacturing industry, and construction.

In primary activities, growth was registered in mining and quarrying, livestock, agriculture, fishing, and aquaculture, and a decrease in forestry and timber extraction informed the Central Bank of Nicaragua (BCN).

During March 2021, the Monthly Index of Economic Activity reported a variation of 13% when compared to the levels reported in the same month of 2020, a period that was marked by the closure of the economy due to the pandemic.

The economic activities that most contributed to the positive result were: Manufacturing Industry and Commerce, and to a lesser extent, Mail and Telecommunications, Financial Intermediation and Other Services -related to health and net taxes-. These contributions were partially offset by the negative variations in agricultural activities, Transportation and Storage, and Hotels and Restaurants highlights the report of the Central Bank of Honduras (BCH).

In January of this year, the Monthly Index of Economic Activity reported a 15% year-on-year drop, which is similar to the behavior recorded from March to December 2020, a period in which the pandemic severely affected productive activities.

This index contracted considerably, due to the effects of the Covid-19 health emergency. Among the economic sectors that were affected were: Hotels and restaurants, other community, social and personal service activities, construction, commerce, financial intermediation, manufacturing industries, electricity and water, real estate, business and rental activities, and transportation, storage, and communications, among others, according to the Comptroller General's Office of the Republic.

In the I Quarter of 2021, 58% of businessmen reported stability in employment, while 36% reported better economic conditions compared to the same period in 2020.

The I Business Perception Survey 2021, conducted by the Coordinating Committee of Agricultural, Commercial, Industrial and Financial Associations (CACIF), indicates that 36% of the executives consulted, confirmed a recovery in their sales in the first quarter of the year, with a growth of up to 20% compared to the first quarter of 2020.

In order to contain the advance of the pandemic, during the rest of the month of May, capacity reductions and restrictions to the circulation of vehicles will be applied, measures that will be applied throughout the national territory.

Through a press conference, the Costa Rican government announced that as of May 13, sanitary measures will be applied, which will be based on the modification of some existing ones.

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