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.

The Treasury has 12 candidate banks to place the first $1.5 billion of Eurobonds.. The Ministry of Finance received offers from a dozen international banks to manage the advisory and sale abroad of $1.5 billion Eurobonds that the Government expects to place in the first quarter of this year. The institution explained that they received offers from interested financial entities and are currently reviewing the fulfillment of eligibility. The Treasury indicated that the selected bidder would only be in charge of placing the first $1.5 billion out of a total of $5 billion in foreign debt approved by Congress to the Government. The legislation allows the Ministry of Finance to sell $3 billion in Eurobonds in 2023. Click for more information

The monetary policy rate will remain at 9%, as agreed by BCCR’s Board of Directors. The Board of Directors of the Central Bank decided at the meeting held on January 25 to maintain the level of the monetary policy rate (TPM) at 9.00% per annum. Among the considerations evaluated by the issuer to leave the indicator unchanged, the current behavior of inflation was one which, although it has eased in recent months, remains above the target set by the monetary authority (3%, with a deviation of one percentage point up or down). Click for more information

Exports of medical devices and services drive the economy but face a challenging 2023. Exports of goods and services closed last year as one of the driving forces behind Costa Rica’s economic activity. In 2023, such exports should maintain their leadership but face a more challenging domestic and international environment due to the global slowdown, the drop in the dollar’s exchange value, and the wave of layoffs by multinational technology companies.Click for more information

Procomer expects export growth to be moderate this year after a “very positive” 2022. Exports will grow at a conservative rate this 2023 after a year that ended with a “very positive result” in sending goods and services to other countries. By the end of 2022, the export of goods generated $12.111 billion for the economy, $1.367 billion more than last year (13% growth). Click for more information

Costa Rica exhibits variety and innovation of ornamental plants at IPM Essen 2023. From January 24 to 27, flower and foliage companies will display the diversity and innovation of Costa Rican plants, flowers, and foliage at the premier business showcase for this sector: IPM Essen, in Germany. Seven Costa Rican companies are participating in the event, together with the Costa Rican Foreign Trade Promotion Agency (PROCOMER) and the country brand Esencial Costa Rica. Click for more information

El Salvador will “only” pay $347 million in 2025 bonds. According to the Ministry of Finance, El Salvador must pay “only” $347 million of bond debt, out of $800 million, maturing in 2025, according to the head of the Ministry of Finance, Alejandro Zelaya. The official explained that this is due to the early purchase of debt that the Executive of President Nayib Bukele made in 2022. Bukele announced on December 7 last year that El Salvador had completed “the second repurchase of its sovereign bonds maturing in 2023 and 2025, acquiring in both operations bonds for more than $647 million ($74 million in this operation).” Click for more information

El Salvador paid the $800 million Eurobond 2023 debt. The payment of $800 million was scheduled for January 24, but the Salvadoran government had already advanced part of those commitments through two bond repurchases launched in the market in 2022. The repurchase contemplated the 2023 and 2025 issues. Of the 2023 maturities, it reached agreements for $175.87 million, while $624.13 million remained to be honored. Click for more information

In 2022 power generation rose by 56% in El Salvador. Inversiones Energéticas (INE) informed through its Twitter account that during 2022 the generation of electric energy increased by 56% compared to 2021 since they injected into the Salvadoran Electricity System a total of 106,718 MWh. The company added that this year the construction of Talnique Solar, the first solar photovoltaic plant in the Salvadoran State, will be carried out. Click for more information

El Salvador’s exports grew 11.3 percent in 2022. El Salvador’s exports totaled $7.115 billion last year, a growth of 11.3 percent compared to 2021, informed the Central Reserve Bank (BCR). In a statistical report, the BCR specified that the manufacturing industry maintains leadership in foreign sales. The agriculture, livestock, forestry, and fishing sectors had exports of $233.6 million, an increase of 34.7 percent.. Click for more information

El Salvador will give greater impetus to agricultural production in 2023. One of the priorities of President Nayib Bukele since the beginning of his administration continues to be to ensure food security for Salvadorans. Therefore, in 2023 the Ministry of Agriculture and Livestock (MAG) will give greater dynamism to activities aimed at increasing agricultural production.Click for more information

IMF rules out risk of recession in the country. IMF rules out the risk of recession in Guatemala, which is out of the one-third of countries that, according to the International Monetary Fund (IMF), will enter recession, indicated representatives of the Bank of Guatemala (Banguat) at a press conference. As the vice president of the central bank, José Alfredo Blanco, explained, “The world base scenario is not one of recession at this time. A slowdown is expected in 2023, but Guatemala is among the group of countries that will maintain positive growth rates. It is even expected to return to its trend level.”. Click for more information

Guatemala seeks business opportunities with Spanish companies. Alejandro Giammattei traveled to Spain for the Fitur 2023 International Tourism Fair, with Guatemala as a partner country. “The event served to learn first-hand about the current situation of the Central American country and analyze the main competitive advantages and instruments that facilitate investment in this market,” the CEOE reported. Giammattei shared “the advantages” of the Guatemalan market and explained “the opportunities offered by nearshoring,” which consists of outsourcing company services by subcontracting companies in other countries. Click for more information

The U.S. contributed $41 million for forest protection in Guatemala. The United States Agency for International Development (USAID) presented the main results of an environmental development and conservation program in which it invested $41.9 million between 2013 and 2023. Some 823,248 hectares of forest in the departments (provinces) of Petén and Alta Verapaz, located in northern Guatemala, have been protected by the program called Climate, Nature and Communities in Guatemala (CNCG), according to USAID in a press release. Click for more information

The agricultural outlook reflects optimism. Agricultural prospects reflect optimism. Price stability in raw materials and moderate growth in exports were part of economic, social, and environmental agricultural analyses during the AgroPerspectives 2023 conference, organized by the sector’s chamber. “The slowdown reflected in Guatemala will be less than in other countries, but the cardamom sector will reach the highest growth rates of the last ten years.” Click for more information

Economic activity grew by 4.4%, according to the BCH. The Central Bank (BCH) informed that the Monthly Index of Economic Activity (IMAE) in Honduras grew by 4.4% in the period from January to November of the previous year and that the improvement was driven by the increase in internal and external demand, even though the international scenario was less favorable. The activities with the highest growth are hotels and restaurants at 23.3 %, financial intermediation and related services at 14.4 %, transportation and communications at 13.7%, private construction at 8%, manufacturing industry at 6.2%, commerce at 2.2%, and mail and telecommunications at 1.5%. Click for more information

Honduran exports increased by more than 20%. Honduran exports increased by 20.9 percent, informed the Central Bank of Honduras (BCH) based on figures from the “Report on Foreign Trade of General Merchandise” to November 2022. The increase in imports amounted to $1.964 billion, 16.4% of the $11.992 billion recorded in the same period of the previous year, mostly due to an increase of $939.5 million in the import of fuels and lubricants. Click for more information

Spain and Honduras will strengthen the migratory status and bilateral trade. Spain is the second country where most Hondurans reside, 150,000 registered, and concentrated around 40,000 in Barcelona, 39,000 in Madrid, 17,000 in Girona, about 10,000 in Valencia, and the rest in other Spanish communities, according to the ambassador. Regarding Health, the ambassador highlighted that in February, an agreement is expected to be closed with Spain for 70 million Euros for the construction of three hospitals in three areas where there were none, as well as equipment for two others, for which five health centers would benefit. Click for more information

Honduras buys 2.5 times more abroad than it exports, warns economist. On January 25, Liliana Castillo, former president of the College of Economists of Honduras, expressed regret that imports are higher than exports. She detailed that Honduras’ imports during the previous year amounted to $13.957 billion. She considered that as part of its economic policy Honduras should seek to reduce its imports and increase its exports. Click for more information

One million quintals of beans are expected to be gathered in the postrera harvest. At least one million quintals of beans should be harvested as a result of late postrera plantings through the delivery of the Bono Tecnológico Productivo (BTP) to small producers. Subsequently, producers who planted in November and December 2022 are about to obtain their harvests in February and March; however, the production from Olancho, El Paraíso, and the northern zone is already reaching the different markets in the country. Click for more information

Nicaragua reduces the devaluation of the córdoba against the dollar from 2% to 1% annually. The Central Bank of Nicaragua reported Monday that its Board of Directors decided to set the sliding rate of the exchange rate of the córdoba, the national currency, against the U.S. dollar, from 2% to 1% annually to help offset the effects of inflation. In 2023, the Nicaraguan government expects its economy to grow by 3% to 4%, with inflation of 5% to 6%. Click for more information

The sugar sector grew 8% in export volume in 2022. Last year, the Nicaraguan sugar sector exported $170 million, for a growth of 5% compared to 2021; in terms of volume, 530 thousand tons, a year-on-year increase of 8% due to higher production in the harvest of that cycle that had good yields, according to the National Commission of Sugar Producers (CNPA). “There were better international prices. However, now we can have an export at $19 per kilogram, but by the time of the export, it may be higher. For example, for March, the price is at $17.94, and last year it was at $17,” said Mario Amador, General Manager of CNPA. Click for more information

ECONOMIC INDEX

Country Exchange rate (x USD) Basic passive rate in local currency Current monetary policy rate S&P sovereign debt indicator Moodys Sovereign Debt Indicator Fitch indicator
Costa Rica 563,87 6,52% 9,00% B B2 B
El Salvador 6,20% Not available CCC Caa3 CCC
Guatemala 7,85 1,75% 4,25% BB- Ba1 BB-
Honduras 24,57 3,52% 3,00% BB- B1 No rating
Nicaragua 36,28 3,30% 7,00% B B3 B-

 

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