While Costa Rica will record growth rates of 3.9% according to the World Bank’s updated report this week, the Panamanian economy maintains the outlook of 2.5% for this year.
The Panamanian economy will be one of the least growing this year 2024, according to the World Bank’s prospects, updated this week.
The agency expects Panama’s gross domestic product to grow 2.5%, the lowest rate among Central American countries, when it was traditionally one of those that grew the most even in double digits.
According to the World Bank this year, Costa Rica’s economy will grow 3.9% and that of the Dominican Republic 5.1%. El Salvador will have a rate of 3.2%, Guatemala 3%, Honduras 3.4% and Nicaragua 3.7%.
As a subregion, the WB expects Central American growth to weaken to 3.2% in 2024 and recover to 3.5% in 2025 due to a faster increase in remittances, on which many countries such as Nicaragua, Guatemala, Honduras and El Salvador depend.
The World Bank’s updated report estimates that growth in Latin America and the Caribbean will decrease further to 1.8 percent this year, then rebound to 2.7 percent in 2025, as interest rates normalize and inflation drops.
By 2025 in the case of Panama the growth rate will resume the rise to 3.5% and by 2026 the WB projects that it will grow 4%.
Made with Flourish
The WB report notes that the region will face more restrictive global financial conditions this year, in addition to high levels of local debt and China’s slowing growth, which will affect the region’s exports.
On the other hand, there is warning of the risks from extreme weather events related to climate change.
It also indicates that increased economic activity in the United States could have a positive impact in Central America and the Caribbean.
While the Latin American and Caribbean region will face economic difficulties by 2024, it is expected to show a gradual recovery in 2025, supported by falling inflation and a wealth of monetary policy. The region ' s economic performance will depend on a combination of domestic and international factors, and commodity prices and global demand will play a moderate role in this scenario, the multilateral agency says.