BLP’s summary of the most important regional news and opportunities offers an overview of the economic, social, and political landscape of Central America at just a click away.
Costa Rica and Ecuador Strengthen Their Trade Alliance
Costa Rica and Ecuador held the first meeting of the Administrative Commission of the Trade Partnership Agreement, making progress in implementing the commitments established in the bilateral treaty. The meeting, led by Costa Rica’s Minister of Foreign Trade, Indiana Trejos, and her Ecuadorian counterpart, Luis Alberto Jaramillo, resulted in the approval of decisions regarding the Commission’s operating procedures and dispute resolution mechanisms—key elements for providing greater legal certainty to the treaty. Ecuador has established itself as the third-largest destination for Costa Rican exports to South America, with bilateral trade reaching US$123 million in 2025. Among the products showing the strongest growth in Costa Rican exports to Ecuador are Kraft paper and cardboard, raw lead, tires, and iron for recycling. Minister Trejos highlighted the potential of this relationship under preferential access conditions, reinforcing Costa Rica’s position in its trade diversification strategy toward South America.
Costa Rica Secures Colombia as a Strategic Tourism Partner
Colombia is emerging as a priority market for Costa Rica’s strategy in the meetings and incentives tourism segment, driven by connectivity between the two countries and growing business interest in combining professional objectives with wellness experiences. During the first half of 2026, Costa Rica welcomed 17,277 Colombian tourists arriving by air, an 8.5% increase that exceeded the South American average and positioned Colombia as the second-largest South American market in visitor numbers to the destination. Through the “Pura Vida Meetings” concept, promoted by the Costa Rica Convention Bureau, the country aims to position itself in sectors such as medical sciences, technology, and financial services, leveraging its ecosystem of innovation and sustainability. In 2025, Costa Rica hosted 95 conferences, with Colombia participating in 39% of them, accounting for 37% of the corporate meetings segment. This strategic approach strengthens Costa Rica’s position as a regional hub for business meetings and opens new investment opportunities in developing business tourism and convention infrastructure.
Costa Rica’s Insurance Market Is Undergoing a Transformation Driven by Financial Planning
The Costa Rican insurance market posted year-over-year growth of 7.2% as of the end of May 2026, according to data from the General Superintendency of Insurance (SUGESE), reflecting an additional investment of approximately ₡44,900 million in health, asset, and family well-being protection compared to the previous year. This momentum is driven especially by voluntary insurance, which grew 6.2%, led by personal health, life, and accident insurance with a 7.8% increase. Together with auto and fire insurance, these products account for nearly 81% of all voluntary insurance sold in the country. According to Javier Solís, general manager of BMI Seguros Costa Rica, this trend reflects a cultural shift: consumers no longer see insurance as a mere requirement, but rather as a long-term financial planning tool. This sustained growth in the insurance market confirms the financial maturity of Costa Ricans and consolidates new investment and development opportunities for the country’s insurance industry.
Costa Rica Is Building One of the Most Ambitious Road Infrastructure Projects in the Region
Costa Rica is making progress on the construction of a 308-meter, four-lane bridge over the Cañuela River on the Punta Sur section of the highway to San Carlos, which will connect the cantons of Naranjo and San Ramón. The bridge is one of Central America’s longest and is focused on the structure’s foundation, which includes 94 piles 25 meters deep, as part of a project involving at least eight simultaneous work sites along an 8.2-kilometer stretch. The project is part of the Ministry of Public Works and Transportation’s Road Infrastructure and Urban Mobility Program, with an investment of nearly US$200 million financed through a loan from the Inter-American Development Bank. The project also includes the construction of overpasses, viaducts, and hydraulic works incorporating measures to adapt to climate change and protect wildlife. This ambitious infrastructure project strengthens Costa Rica’s road connectivity and consolidates its position as a country committed to large-scale projects to drive regional development.
El Salvador Expands Its Diplomatic Network and Opens New Doors for Investment and Trade
El Salvador welcomed five new concurrent ambassadors—from Saudi Arabia, Kenya, San Marino, Jamaica, and Burundi—on a day that set the agenda for projects in energy, exports, tourism, and digital transformation. With Saudi Arabia, progress is being made on the Biogas Power Plant and the cleanup of the Acelhuate River—a project involving an investment of US$98.4 million that will benefit more than 1.2 million residents and treat 70% of the wastewater in the San Salvador Metropolitan Area. With Kenya, discussions are underway to promote Salvadoran specialty coffee in African markets, and cooperate on e-government and digital transformation. San Marino expressed interest in boosting the “orange economy,” creating opportunities for Salvadoran designers and artisans, while ties with Jamaica are being strengthened in trade, technology, and tourism. With Burundi, El Salvador is exploring ways to expand its diplomatic presence in Africa, including seeking observer status with the African Union. These new diplomatic relations open the door to concrete projects in infrastructure, renewable energy, and international trade for the country.
El Salvador Posts Its Fastest Economic Growth in Nine Months
El Salvador’s Economic Activity Volume Index grew 5.6% in May 2026, its strongest growth since September 2025, driven mainly by the construction industry and real estate activities, according to the Central Reserve Bank. Construction advanced 9.7%, supported by private-sector residential and commercial projects, public works in road and educational infrastructure, and a 21.5% increase in cement consumption. Trade, transportation, hotels, and restaurants grew by 6.7%, driven by increased movement of goods and Mother’s Day celebrations, while government services also grew by 6.7% thanks to the implementation of social and public infrastructure programs. Industrial production grew by 4.5%, with the pharmaceutical and food industries performing particularly well. This performance confirms the strength of the Salvadoran economy, underpinned by domestic and foreign demand, and solidifies new investment opportunities in construction, services, and manufacturing.
Salvadoran Ports See a Notable Uptick in Commercial Activity
Cargo volume at the Port of Acajutla, El Salvador’s main maritime terminal, grew by 25.45% during the first seven months of 2026, according to the Autonomous Executive Port Commission. The terminal handled 218 ships during that period—37 more than in 2025—while at the Port of La Unión, vehicle traffic increased by 60%, with 62 ships received—21 more than the previous year. Both terminals are managed by the Pacific Port Union, a joint venture formed in December 2024 by the Turkish group Yilport and CEPA, which has already acquired 140 pieces of equipment to modernize operations and minimize waiting lines that previously reached up to 25 ships. Before the end of 2026, construction will begin on a new pier in Acajutla, with an investment of US$500 million, as part of a total package of US$1.615 million committed by the Turkish group for both ports. This port growth confirms the strengthening of El Salvador’s logistics infrastructure and its growing appeal for investment in international trade.
El Salvador’s Financial System Has Seen Significant Growth in Savings Deposits
Time deposits in El Salvador’s banking system reached US$8,369.1 million at the end of May 2026, representing a year-over-year increase of 13.3%, according to the Banking Ranking published by the Salvadoran Banking Association (ABANSA). The strongest growth was observed in deposits with terms of up to one year, which totaled US$7,554.4 million, representing a 14.6% increase compared to May 2025. Overall, deposits in the banking system reached US$23,200.9 million, a year-over-year increase of 15.4%, driven primarily by demand deposits, which totaled US$14,429.2 million, up 16.4%. This trend reflects increased deposit-taking by Salvadoran financial institutions during the first five months of the year. This sustained growth in bank savings confirms the strength and confidence in El Salvador’s financial system, strengthening its capacity to finance credit and productive investment in the country.
Guatemala Pushes Forward with the Most Far-Reaching Reform of Its Port System in Decades
Guatemala passed the National Port System Act, which establishes a new National Port Authority (APN) tasked with modernizing the administration, investment, and operation of the country’s ports. The reform incorporates new investment models, including public-private partnerships and paid usufruct agreements of up to 50 years, renewable, allowing for the expansion of port capacity without relying exclusively on public funds. The law also mandates implementation of the International Ship and Port Facility Security Code, one of the world’s leading maritime security standards. Among its core objectives is improving the country’s logistical competitiveness through the digitization of procedures—such as the Single Port Window—and the development of a Comprehensive National Port Development Plan, which will be updated every ten years. This legal framework modernizes the governance of Guatemala’s port system and strengthens the conditions for attracting new investment in maritime infrastructure and international trade.
Guatemala Aims to Conquer New Markets with Its Hass Avocados
Guatemala’s Hass avocado industry plans to add up to 20,000 metric tons for export by 2028, driven by new growing areas and steadily rising global demand. Exports of this product generated nearly US$17 million by the end of 2025, with the Netherlands accounting for 50% of purchases, followed by Honduras, the United Kingdom, El Salvador, Italy, and Belgium. The global avocado market is projected to grow by nearly 7% annually through 2030, while in Guatemala, production is growing at 15% to 20%—a figure that could rise to 25% as new plantations come online. In addition to strengthening its shipments to Europe, the Guatemalan industry is making progress in efforts to enter Asian markets such as South Korea and Taiwan, while also exploring opportunities in Japan. This market expansion and diversification solidify the Hass avocado as a strategic product for Guatemala’s export growth and agricultural investment.
The IMF Recognizes Guatemala’s Economic Strength and Outlines a Roadmap for Greater Growth
The International Monetary Fund concluded its Article IV Consultation for Guatemala with a favorable assessment of the country’s macroeconomic performance, highlighting solid economic fundamentals, such as low inflation, a prudent fiscal stance, and a strong external position. Economic activity posted year-over-year growth of 4.5% through April, while public debt remains at sustainable levels equivalent to 27% of GDP, and the current account surplus reached a record 4.7% of GDP in 2025, driven by family remittances. The IMF projects economic growth of 3.8% for 2026, with the potential to approach 4% in the medium term if public investment and structural reforms move forward. Among its key recommendations, the IMF highlighted the need to accelerate infrastructure investment, strengthen tax administration, and advance the development of the stock market and the fintech sector. The organization also viewed the new anti-money laundering law positively, noting that it reinforces Guatemala’s institutional credibility ahead of future international assessments and strengthens its appeal to investors.
Honduras Launches a Digital Platform to Streamline Foreign Trade
The Honduran government unveiled the Honduran Single Trade Portal (PUCH), a digital tool that connects seven government agencies and, in its initial phase, incorporates 25 procedures related to foreign trade permits, licenses, and certificates. The platform allows users to manage and track their import and export processes entirely online from a single point of access. President Nasry Asfura noted that this initiative is part of efforts to move toward a digital government and streamline processes for the productive sector. The platform aims to streamline foreign trade procedures, boost exports, and improve the country’s competitiveness through collaboration among government agencies. This type of digital modernization enhances administrative efficiency and strengthens Honduras’ position as a more competitive destination for international trade and investment.
Honduras Opens New Doors for Technical Cooperation with Israel in Strategic Sectors
Honduras reestablished its highest-level diplomatic representation in Israel, with the accreditation of José Luis Núñez Bennet as ambassador, completing a normalization process that opens new opportunities for bilateral cooperation. The new joint work plan covers areas such as precision agriculture, efficient water management, cybersecurity, smart infrastructure, digital transformation, and renewable energy, scholarships, specialized training, and expert exchanges. In June, both countries had already signed an addendum to the bilateral cooperation plan, expanding the agenda to include food security, agricultural modernization, public health, and technological innovation. For Honduras’ agro-industrial sector, this cooperation can facilitate the adoption of irrigation systems, crop monitoring, and water resource management. In the digital sphere, it opens up opportunities for software, telecommunications, and technology infrastructure companies. This technical partnership strengthens Honduras’ productive capacities and expands its options for cooperation and investment in sectors critical to the country’s development.
Honduras Maintains a Relative Competitive Advantage for Its Exports
Honduras’ Global Real Effective Exchange Rate Index (REER) remained in the zone of theoretical competitiveness gains for exports, according to the latest report from the Central Bank of Honduras. The indicator showed a year-over-year change of -1.04% in June 2026, reflecting that Honduran goods maintained a relative advantage over the country’s main trading partners. This trend was primarily driven by the depreciation of the lempira against the dollar. Meanwhile, the currencies of Honduras’ main trading partners appreciated on average, bolstering the relative positioning of Honduran products in international markets. The report highlights that Honduras strengthened its competitiveness within Central America relative to El Salvador, Costa Rica, and Nicaragua, thanks to a more favorable exchange rate for its exports. This outlook confirms that, in relative terms, Honduras maintains a solid position to compete with its products in international and regional markets.
Nicaragua Maintains a Trajectory of Economic Expansion with Favorable Outlook for 2026
The Central Bank of Nicaragua maintained its economic growth projection for 2026 within a range of 3.5% to 4.5%, with inflation kept under control between 2.5% and 3.5%, according to its most recent monetary and exchange rate policy report. The bank noted that during the first half of the year, the economy continued to expand, with low unemployment and inflation rates, supported by an appropriate macroeconomic policy framework. The Central Bank emphasized that fiscal management has generated surpluses, enabling the government to accumulate financial reserves, thereby strengthening the country’s ability to respond to potential external shocks. While acknowledging risks stemming from international geopolitical and trade uncertainty, the Central Bank noted that the resilience of Nicaragua’s main trading partners has bolstered demand for its export commodities. Nicaragua’s GDP grew by 4.9% in 2025, marking the fifth consecutive year of expansion, reinforcing confidence in the country’s economic stability and investment opportunities.
Central America Establishes Itself as a Competitive Hub for Global Foreign Investment
The Greenfield FDI Performance Index 2026, compiled by fDi Intelligence, confirms that Central America is establishing itself as a competitive hub for global foreign investment. Costa Rica, El Salvador, and Panama attracted more new investment projects than expected given the size of their economies. Costa Rica ranked fourth globally with an index score of 6.5, making it the only Latin American country in the top 20 and the only OECD member in the top 15 globally. El Salvador was the region’s second-highest-ranked country, 38th globally, attracting more than twice the number of projects expected from its economy’s size. Panama ranked 45th and also stands out for its 5.7 FDI projects per million inhabitants. Guatemala, by contrast, ranked 80th, below its relative potential. The report confirms that Central America is establishing itself as a competitive hub for investments in manufacturing, medical devices, technology, and corporate services, thanks to the region’s institutional stability and specialized talent, opening new opportunities to attract high-value productive projects.
BLP INSIGHT
Reforms to the Single Property Tax
The IUSI, the Fiscal Stamp Tax Law, and the Tax Update Law in Guatemala have been reformed. A special regime is created for “habitual residence” (rate of 3 per thousand), legally defining this concept for the first time. Tax benefits are incorporated for individuals: an exemption for those over 60, an exemption for 20 years of timely tax compliance, and a temporary exoneration for a first home acquired through financing. Tax administration is strengthened through greater coordination between municipalities, the Property Registry, the Ministry of Public Finance, and SAT. Real estate income tax treatment is modified: gains from developers/real estate operators will no longer be taxed as capital gains, but rather as income from lucrative activities. The decree is pending approval/veto by the Executive Branch, and possible legal challenges are anticipated given its scope.
ECONOMIC INDEX
| Country | Exchange Rate (local currency per USD) | Basic Passive Rate (local currency) | Monetary Policy Rate | Sovereign Debt | Year-on-Year Inflation | ||
|---|---|---|---|---|---|---|---|
| S&P | Moody’s | Fitch | |||||
| Costa Rica | 454.86 | 3.65% | 3.00% | BB | Ba2 | BB | -0.31% |
| El Salvador | 8.75 | 4.63% | N/A | B- | B3 | B- | 2.76% |
| Guatemala | 7.62 | 4.65% | 3.50% | BB+ | Ba1 | BB+ | 2.27% |
| Honduras | 26.80 | 7.14% | 5.75% | BB- | B1 | N/A | 5.83% |
| Nicaragua | 36.62 | 1.44% | 5.75% | B+ | B2 | B | 3.98% |
06/08/2026 | Source: secmca.org
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