Central America and Caribbean Economic Outlook
This year, regional economic growth will decelerate; above-target inflation and still-elevated interest rates will hinder domestic purchasing power, while dwindling global momentum will dampen the external sector. The evolution of the U.S. labor market—impacting remittances and the tourism industry—and extreme weather events are factors to watch.
Central America and Caribbean Inflation
In March, regional inflation receded to a 13-month low of 6.0% (February: 6.7%); barring Cuba, price pressures moderated across the region. Moreover, countries that have reported data for April saw continued downward inflationary trends. Inflation will moderate in 2023, although it will remain above central banks’ targets in most cases, dampening purchasing power.
This chart displays Economic Growth (GDP, ann. var. %) for Central America and Caribbean from 2010 to 2019.
| 2017 | 2018 | 2019 | 2020 | 2021 | |
|---|---|---|---|---|---|
| GDP per Capita (USD) | 5,586 | 5,667 | 5,768 | 5,354 | - |
| Economic Growth (GDP, ann. var. %) | 2.1 | 1.9 | 2.2 | -7.3 | 7.4 |
| Private Consumption (ann. var. %) | 2.3 | 2.6 | 3.2 | - | - |
| Unemployment (% of active population, aop) | 7.8 | 7.6 | 7.7 | 11.1 | 8.8 |
| Fiscal Balance (% of GDP) | -3.2 | -4.0 | -3.1 | - | - |
| Public Debt (% of GDP) | 45.6 | - | - | - | - |
| Inflation (CPI, ann. var. %, aop) | 3.0 | 3.1 | 2.6 | 2.8 | 4.8 |
| Policy Rate (%, eop) | 4.36 | 4.49 | 3.57 | 2.06 | 2.76 |
| Exchange Rate (LCU per USD, eop) | 145.5 | 153.4 | 147.4 | 159.8 | 156.5 |
| Current Account Balance (% of GDP) | -0.9 | -1.7 | -0.4 | - | - |
| External Debt (% of GDP) | 62.7 | 63.9 | 64.7 | 74.7 | - |
| Fixed Investment (ann. var. %) | 3.8 | 15.5 | 0.8 | - | - |