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’s economy will grow by 3.9% this 2024, according to the World Bank forecast. In January, the bank’s forecast was that such growth would be 4%, so it remains practically unchanged with the update. The organization estimates that in 2025 and 2026 growth will be 3.7%. Click for more information

The IMF begins a visit to Costa Rica to evaluate the disbursement of the last $521 million. Representatives of the International Monetary Fund (IMF) will be visiting Costa Rica between April 8 and 12, to meet with different sectors, evaluate the economic situation, and supervise the progress in the commitments that the country assumed within the budgetary support programs with the organization. If the country meets the quantitative criteria and advances in structural measures, and after a review by the Executive Board of the multilateral organization, Costa Rica will have access to a total of $521 million from two financing lines: $275 million from the IMF’s Extended Fund Facility (EFF) and $246 million from the Resilience and Sustainability Facility (RSF). Click for more information

BCCR takes advantage of a strong increase in reserves to invest in more countries and at longer maturities. The Central Bank of Costa Rica (BCCR) increased diversification when investing its international monetary reserves, which reached historic highs in recent months, surpassing the $14 billion mark. In view of this remarkable increase, the Central Bank confirmed that it has opted to diversify the investment of these resources by reducing short-term placements in order to increase those of longer terms. Click for more information

 Interannual inflation in Costa Rica closed in March at minus 1.19%. Inflation in Costa Rica, measured by the inter-annual variation of the consumer price index (CPI), registered a new negative result in March, ending with a value of -1.19%, informed the National Institute of Statistics and Censuses (INEC). This result implies that for the eleventh month inflation is below the tolerance range of the Central Bank of Costa Rica, set between 2% and 4%. The issuer’s target is 3%. Of these 11 months, in a total of 10, inflation remained in negative territory, according to INEC information. Click for more information

Appreciation of the colon reached 14.1% in 2023 due to the abundance of dollars, according to the Central Bank’s annual report. The nominal appreciation of the colón against the dollar reached 14.1% in 2023. This is stated in the Annual Report of the Central Bank of Costa Rica (BCCR). In that year, the U.S. currency lost value in that magnitude due to the strength of the colón. Data from the Monetary Authority indicate that public operations with foreign exchange intermediaries generated a surplus of $7.353 billion, which means that it almost doubled the surplus registered the previous year: $3.706 billion. A year earlier, in 2021, this net result between purchases and sales was only $2.469 billion. Click for more information

El Salvador prepares a new bond issue. El Salvador is preparing a new bond issue in international markets. The issuance could be around $1 billion, the same as the issuance made in 2020, although the interest rate would be higher than the one paid at that time. This announcement of a new issue comes after the government declared that it was looking to make a third repurchase for the 2025, 2027 and 2029 bonds totaling $1.749 billion. Click for more information

Banks foresee stability in interest rates in the Salvadoran market in 2024. Interest rates in El Salvador will remain stable in 2024 after several adjustments in the international market last year, especially in the United States where the Federal Reserve (Fed, central bank) applied several hikes to curb inflation. In El Salvador, interest rates in the financial system depend more on domestic liquidity, with remittances playing a key role because they enable households to allocate more money for savings. Click for more information

World Bank improves El Salvador’s projection for 2024, but the country still lags behind in the region. The World Bank raised El Salvador’s growth outlook for 2024. In this report, the World Bank improved from the 2.3% it initially estimated last January to 2.5% for El Salvador in 2024.  For 2024, the BCR forecasts that the economy will remain in a range of 3% to 3.5%. Click for more information

El Salvador added 41 energy exporting companies at the end of 2023. El Salvador closed, 2023 with 41 energy exporting companies, according to the president of the Central Reserve Bank (BCR), Douglas Rodríguez. This figure exceeds the 22 companies that were in place for 2019, which would mark an increase of 86.3% by 2023. The president of the BCR assured that the country stopped importing energy. The institution also said that currently, 64.2% of electricity generation is from renewable sources. Click for more information

IMF puts Bitcoin as a “key element” in its negotiations with El Salvador. The International Monetary Fund (IMF) stated that addressing the risks derived from bitcoin, the official currency in El Salvador, is a “key element” of the talks it is having with the government of Salvadoran President Nayib Bukele for an economic agreement. Negotiations with the Salvadoran Executive are focused on implementing policies to strengthen economic governance and fiscal and external sustainability, and to boost productivity growth. Click for more information

Textile exports are on the rise. For 2024, the Apparel and Textile sector foresees a 5 percent increase in export income, compared to 2023, which registered $1.848 billion, informed the Guatemalan Apparel and Textile Association (Vestex). According to the president of Vestex, Carlos Arias, last January the segment represented 12.3 percent of the country’s total exports, and projections are optimal due to the purchasing behavior in the different markets. Click for more information

Construfer seeks new connections. Forging strategic alliances, promoting networking and contributing to the dynamics of the economy are some of the objectives of the International Construction Fair (Construfer), which will be held from April 11 to 14 at Fórum Majadas, informed the Guatemalan Chamber of Construction (CGC). Click for more information

Platform will streamline foreign trade. In order to streamline trade transactions, the Ministry of Economy (Mineco) relaunched the virtual platform for the Foreign Trade Incident Report (RICE), where companies, customs agents and importers can report any type of incident when performing an operation related to foreign trade. At any time and from their electronic devices, users can indicate which ministry or institution they had an incident with, the estimated cost, how often the inconvenience has occurred, in which port, from which country the merchandise originates, or any other type of delay, among other variables. Click for more information

Deputies analyze amendments to be included in the healthy labeling bill. The elimination of the tax rate and reduction of penalties and extension of the term of validity are some amendments to be included for approval in the plenary session of Congress. Click for more information

Family remittances, Central America’s lifeline, reach record levels. Money sent by Central American immigrants in the United States to their relatives has risen to record levels and represents a quarter of the combined GDP of El Salvador, Guatemala, Honduras, and Nicaragua. The four countries together received nearly $42 billion in family remittances in 2023, according to AFP calculations based on official data from central banks and the intergovernmental Central American Monetary Council, a record figure. Click for more information

ENEE will tender 1,500 megawatts of energy to cover the demand for the next 10 years. The interim manager of the Empresa Nacional de Energía Eléctrica (ENEE), Erick Tejada, stated that they are working on a plan to tender at least 1,500 megas of energy and cover the demand for the next decade. He pointed out that since 2014 there has never been a competitive bidding and every purchase has been emergency reaction; therefore, they are planning to bid 270 megawatts this year, 250 in 2025 and 200 in 2026. Click for more information

Energy demand exceeds availability by 82.61 megas. The internal availability of energy in the electric park of the Empresa Nacional de Energía Eléctrica (ENEE) continues to be exceeded by the consumption of almost two million subscribers. According to the daily report of the National Dispatch Center (CND), the total availability reached 1,812.95 megawatts, which includes the import of 30 MW from the regional market, less than the demand of 1,847.62 megawatts. Click for more information

Chancellor Reina justifies the denunciation to ICSID, based on an international trend. The Chancellor of the Republic Eduardo Enrique Reina, justified the denunciation of Honduras to the International Center for Settlement of Investment Disputes (ICSID), stating that it is a trend that is occurring internationally with similar treaties. Click for more information

CNI and CCIC renew cooperation for investor assistance. The Chamber of Commerce and Industries of Cortes (CCIC) and the National Investment Council (CNI) renewed a cooperation agreement for the operation of the investor counseling window in the Business Portal of this trade organization. The objective is to develop an inter-institutional alliance with the purpose of promoting investment in the country, advising interested parties on legal, technical and economic-financial matters, fostering legal security for established and soon-to-be established investors by promoting the Conciliation and Arbitration Center (CCA-CCIC). Click for more information

$800 billion in sovereign bonds for ENEE, announces the Government. According to information provided by the Minister of the Ministry of Finance, Marlon Ochoa, Honduras would be seeking the placement of $800 billion in sovereign bonds. The Vice President of the National Congress, Hugo Noé Pino, has confirmed that this would be a normal action within the budget’s movements. “The funds for financing are approved,” he noted. Click for more information

Ortega adds another loan with China. Assembly approves new loan for almost $27 million. The Nicaraguan National Assembly urgently approved another loan with China for $26.9 million for the construction of three gas storage spheres in Nicaragua. From December 5, 2023 to April 10, 2024, China has approved a total of $602.8 million in loans to Nicaragua. Click for more information

Nicaragua breaks diplomatic relations with Ecuador. Nicaragua condemned the barbarism and neo-fascist policies of the government of Ecuador, as well as the violation of international law implied by the acts that occurred at the Mexican embassy. Moreover, the Nicaraguan government expressed solidarity and assistance against any legal action facing the Mexican government and its president, Andrés Manuel López Obrador. 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 Interannual Inflation
Costa Rica 498,23 4,89% 5,25% B B2 BB -1,19%
El Salvador 6,40% Not available B- B3 B-
Guatemala 7,77 3,56% 5,00% BB- Ba1 BB 4.18%
Honduras 24,66 6,16% 3,00% BB- B1 No rating 4.76%
Nicaragua 36,62 3,30% 7,00% No rating B2 B- 5,60%

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