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.

After rigorous negotiations, Deputies and Government agree to issue $5 billion in Eurobonds. After a long meeting, the deputies and the Government agreed on the authorization to issue $5 billion in external debt bonds or Eurobonds. The amount was the main obstacle to reaching an agreement. Initially, the Government asked for $6 billion. According to Nogui Acosta, Minister of Finance, the accord followed the implementation of scanners in ports to avoid tax evasion and the use of ports and customs for the shipment or reception of drugs. They also agreed to approve some bills and to promote the construction of others, among them a Public Debt Framework Law in collaboration with the Ministry of Finance. Click for more information.

Treasury achieved moderate fundraising in the penultimate auction before paying Christmas bonuses. The Ministry of Finance sold ¢57,205 million and $39.7 million in domestic debt bonds on November 21, during an auction held by the National Treasury. The entity allocated most of the securities, in both currencies, with maturities between 2023 and 2035. The Treasury only has one auction left in this month of November, prior to the payment of the Christmas bonus for Central Government employees, on December 2. In addition, for the last month of the year, it will have four other calls to investors. Click for more information.

The basic deposit rate increased from 6.17% to 6.24% this week. The basic deposit rate increased this week from 6.17% to 6.24%, which shows that savers are receiving more interest. At the same time, it implies an increase in installments for those who have credit operations linked to this indicator. This is the third consecutive week of increases. According to data provided by the General Superintendent of Financial Institutions (SUGEF) up to August, there were 1,322,407 credit operations in national currency with variable or semi-fixed rates. Of these, 700,854 were linked to the basic rate. Click for more information.

Costa Rica: an ideal destination for technology companies. In recent years, the country has become an exporter of services in technology and communications because Costa Rica has attractive conditions for foreign investment, qualified human talent, technology infrastructure, and a strategic geographical location where transnational companies feel safe. According to data from the Chamber of Information and Communication Technologies (CAMTIC), in its Digital Mapping study, around 450 companies in the country are linked to the ICT sector, and this generates approximately 42,256 direct jobs, where 86% have a university degree and the volume of sales is at least $1.3 billion. Click for more information.

In one month, the number of applications for hemp cultivation in the MAG rises from 2 to 11. A total of 11 applications for authorization to grow hemp are pending at the Ministry of Agriculture and Livestock (MAG). This represents a change from a month ago when the MAG only reported two applications and none had been granted. These applications are the first to be processed after the publication of the regulation that allows the cultivation and industrialization of this product. Click for more information.

Government forecasts a 14% increase in exports by the end of 2022 compared to the previous year. El Salvador’s trade with other countries has a high probability of closing the year with positive numbers. During President Nayib Bukele’s administration, Salvadoran exports have achieved historically high levels. According to the president of the Central Reserve Bank (BCR), Douglas Rodríguez, export revenues will increase by 14% by the end of the year compared to 2021. Energy is among the fastest-growing exports this year. Click for more information.

Salvadoran tourism should generate more than $2.4 billion by the end of 2022. The Ministry of Tourism stated that North American tourists are the ones that continue to boost tourism in El Salvador. The General Directorate of Customs has requested to extend the elimination of taxes on luggage up to $3,000. The Minister of Tourism, Morena Valdez, indicated that between January and October the country had already surpassed the projections for 2022 since it had received 1.9 million visitors and accumulated $1.7 billion, 94% and 24.3% more than a year ago. Click for more information.

El Salvador will sign a $106 million loan with the IDB to support tourism development in the east of the country. The Surf City Project, which is the anchor of the tourism development promoted by President Nayib Bukele since the beginning of his administration, to project the country internationally and attract more foreign investment, will have a new boost with the $106 million in financing to be granted to El Salvador by the Inter-American Development Bank (IDB). Click for more information.

Modernization of ANDA’s Northern Zone System will be financed with funds from the IDB and World Bank. The government of President Nayib Bukele, through the National Administration of Aqueducts and Sewerage (ANDA), continues working to improve the supply of drinking water in greater San Salvador, including the scheduled rehabilitation of the North Zone System, which supplies potable water to the northwest of San Salvador, Santa Tecla, Ciudad, Merliot, Zaragoza, and other surrounding sectors. The president of ANDA, Rubén Alemán, confirmed that they are “about to receive two large loans… one with the Inter-American Development Bank (IDB) and the other with the World Bank.” Click for more information.

The government of El Salvador will have almost $412 million more for the Los Chorros viaduct. The Legislative Assembly approved in the last plenary session a second loan for $166 million to finance the construction of the viaduct and expansion of a section of the Los Chorros highway, thus adding $411.8 million available for this project. The new loan that El Salvador will be able to subscribe to with the Central American Bank for Economic Integration (CABEI) is in addition to the $245.8 million already ratified by the Legislative Assembly in July of last year. Click for more information.

Foreign Trade is Q5.4 billion above the goal. In 10 months, the Superintendence of Tax Administration (SAT) has received Q74.6 billion, reporting Q10.1 billion more than projected, and half of this surplus comes from customs revenues. Foreign trade taxes amounted to Q23.5 billion from January to October, an amount that exceeded by Q5.4 billion the Q18 billion programmed for the period. Click for more information.

The highway will generate social and economic impact. An investment of $125 million in private capital and the generation of 1,700 jobs is expected from the reconstruction of the Escuintla-Puerto Quetzal Highway (AEPQ), which will have an impact on commercial productivity in Masagua, Iztapa, Puerto San José and the departmental capital in Escuintla, and Taxisco in Santa Rosa. The project will enable 104 kilometers of highway (42 in each direction plus two complementary ones) and will run from 60.9 to 102.1. Click for more information.

To facilitate economic take-off. The Ministry of Economy (Mineco) will start in January the strategy of Guatemala to the world, welcome to the take-off of the economy through a tour that will seek to open competitive markets, as well as participation in the International Tourism Fair (Fitur). In February, entrepreneurs who have received the White Seal distinction are expected to participate in India, and in March, there will be an activity in Qatar. Click for more information.

Proposal to reduce airport taxes. The World Bank (WB) suggested reducing the airport tax paid for each air ticket on routes between Central America, which would favor the value of the ticket. According to a WB study, in order to encourage greater demand for flights between countries of the region, a reduction in airport taxes from $50 to $15 would reduce ticket prices that, at present, cost from $250 to $1200. The initiative was presented to businessmen and economic officials of the Isthmus during the event Trade Facilitation: the road to reactivation, promoted with the support of the Secretariat for Central American Economic Integration (Sieca) and the aforementioned multilateral organization, on November 10, in Antigua Guatemala. Click for more information.

Central America maintains its growth. “ECLAC forecasts that the economies of Central America will grow above the average for Latin America during the current fiscal year.” In a scenario as uncertain as the one we see today, it is quite complex to analyze the behavior of economies, as well as to extract reliable forecasts that enable us to predict the evolution that these economies are expected to have in the short, medium, and long term. The number of events occurring on a daily basis, in addition to the impact they all have on the different countries that make up our planet, make the work difficult for economists who, from time to time, are forced to make readjustments to macroeconomic tables which, as we can see in the analyses published to date, are out of date within a few weeks of being published. Click for more information.

The central government will contract L 196,636 million for the 2023-26 budget. Sefin has $1 billion from the Central Bank of Honduras for the 2022-2023 budget. Domestic and external public debt is consolidating as the second source of financing for the central government’s budget. Over the next four years according to projections of the Ministry of Finance (Sefin), 196,636 million lempiras must be contracted. It adds that by 2023, the net financing of the central government balance will amount to 49,556.4 million lempiras (6% of GDP) that will be financed with net internal funds for 35,097.6 million (4.2% of GDP) and external funds for 14,458.8 million, equivalent to 1.8% of GDP. Click for more information. 

The Ministry of Finance recorded a surplus of L 30,747.1 million. According to official figures, revenues report the execution of 74.2%, while expenditures are 65.6%. Of the public investment program, only 24.8% has been executed. The financial account of the Honduran public administration continues to show positive figures. One of them is the comparison of revenues and expenditures of the general budget of the Republic 2022, with a positive result known as surplus. The latest data published by the Ministry of Finance (Sefin) indicates that the availability of resources is 30,747.1 million lempiras. Click for more information.

With a budget of L. 6,589 million, SAG will seek to contribute to the country’s food security. The Budget Commission of the National Congress approved the new General Budget 2023 for the programs, directorates, and entities attached to the Secretariat of Agriculture and Livestock (SAG), which is 6,589 million lempiras, with which the SAG will work to eliminate extreme poverty in the country. “The budget of this Secretariat for the fiscal year 2023 is focused on complying with four pillars, which are knowledge management, institutionalism and governance, inclusive financing and dynamization of commercialization and market,” argued the head of the SAG, Laura Suazo. Click for more information.

Foreign exchange from tourism is close to 9% of the GDP, highlights Canaturh. The president of the National Chamber of Tourism of Honduras (Canaturh), Michael Wehmeyer, said that the industry without chimneys in Honduras is close to reaching a 9 percent contribution of the Gross Domestic Product (GDP) in 2022. “We are close to reaching more than 9 percent of the contribution of the Gross Domestic Product (GDP). So far, I do not have the exact number of how many millions, but the idea is to reach more than 450 billion lempiras of what is produced in tourism,” Wehmeyer said. Click for more information.

Banana exports generated $465 million. Banana exports resumed their good momentum after the adversities of climate change with the generation of $465.6 million in foreign exchange at the end of the third quarter of 2022, higher by $248.6 million in relation to the $217.1 million left in the same period of 2021. The foreign trade report of general merchandise issued by the Central Bank of Honduras (BCH) highlighted an increase of 8.4 million 40-pound boxes in exported volumes, equivalent to $153 million. From January to September, 20.3 million boxes of bananas were sold in the international market, and in the third quarter, Click for more information. 11.9 million boxes. Click for more information.

Nicaragua’s economic outlook is favorable, according to an IMF mission. Nicaragua’s GDP grew by 10.3% in 2021 and is projected to grow by 4% in 2022, sustained by private consumption and exports, according to the IMF and the Central Bank of Nicaragua. Nicaragua’s economic outlook is favorable, although there are risks of external factors slowing gross domestic product (GDP) growth and impacting inflation. Click for more information.

Sandinista legislators approve the 2023 General Budget with a surplus. The General Budget of the Republic for 2023 presents a surplus of up to $130 million “for any emergency,” according to the Sandinista minister Ivan Acosta. The law of the General Budget of the Republic for 2023 was approved by the National Assembly, showing a surplus of up to $130 million, which is considered far from reality by some analysts due to the migratory reality the country is going through. Last October, the Sandinista Minister of Finance and Public Credit, Iván Acosta, presented before the National Parliament the draft Law of the General Budget of the Republic for 2023 with a projected income of $3.047 billion and expenditure of $2.916 billion. Click for more information.

Nicaragua and Russia sign agreement on the use of ICT. The Government of Nicaragua and Russia signed an agreement for the use of Information and Communication Technologies (ICT), with the aim of “preventing, detecting and investigating” their misuse, the Nicaraguan Foreign Ministry informed on Tuesday. “Bilateral communication and information exchange will open spaces for us to favor the implementation of institutionality, prevent, detect, investigate the incorrect, abusive and criminal use of ICTs, maintaining a safe infrastructure environment,” said Nicaraguan Foreign Minister Denis Moncada at the event. Click for more information. 

Nicaragua and Russia sign a roadmap for the use of atomic energy. The Government of Nicaragua expects Russian cooperation to strengthen “the capabilities of professionals, especially in the field of medicine, hydraulic, geothermal and wind energy”. The Government of Nicaragua and Russia signed a road map for the peaceful use of atomic energy, Nicaraguan authorities said Monday. “This instrument is in line with the legal bases for cooperation in the use of atomic energy for peaceful purposes. With the signing of the Roadmap, guidelines are drawn up to advance in the field of cooperation in the non-energy applications of nuclear and radiological technologies,” the Nicaraguan Government informed. Click for more information.

China donates to Nicaragua 10,000 boxes of capsules against covid-19. The Government of China donated to Nicaragua 10,000 boxes of Lianhua Qingwen capsules, used in the Asian country against covid-19, informed the Nicaraguan Ministry of Health on November 22. 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 610,53 6,24% 9,00% B B2 B
El Salvador 6,20% Not available CCC Caa3 CCC
Guatemala 7,82 1,75% 3,00% BB- Ba1 BB-
Honduras 24,64 6,37% 3,00% BB- B1 No rating
Nicaragua 36,16 1,21% 6,50% B B3 B-

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