WASHINGTON, D.C., April 26th, 2021 – A new report by the World Bank studied growth factors, constraints, and opportunities for each of the countries that make up Central America (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama). It determined there were priorities for each country (and for the region) that would stimulate sustainable growth and job creation.
The report, called “Unleashing Central America’s Growth Potential” recognized that the region had suffered its largest economic recession in its history (caused by the pandemic and exacerbated by hurricanes Eta and Iota) but identifies how it can recover and move forward towards strong and sustainable economic growth.
Released today, April 26th, 2021, the report highlights the reforms necessary for CA countries to boost their economies through a series of reforms in key areas. These include; reducing costs, reducing barriers to trade, boosting investment in human capita as well as innovation, physical and digital infrastructure, attracting private investment through improving business environment and the quality of institutions. It also promotes the greater inclusion of women and young people in the labor market.
The study went back over a thirty year history of Central America and found that when it came to performance, although between 1991 and 2017 the region’s economy grew 4.5% per year on average (better than the rest of Latin America and the Caribbean), the economic growth was achieved with little growth in productivity The increase in productivity that the World Bank is looking for is defined as a greater ability of businesses and the workforce to produce more and better goods and services.
“Now is the moment to rethink the future of Central America and introduce strategic reforms to benefit current and future generations with more economic opportunities and prosperity,” said Michel Kerf, World Bank Director for Central America and the Dominican Republic.
“The pandemic has significantly affected economic growth and reduced fiscal space in the region. However, the resumption of global trade and the recovery of the United States and China create opportunities to attract new domestic and foreign investments and increase the volume and value of Central American exports, which can boost sustainable and inclusive growth, with greater creation of good jobs and poverty reduction.”
The World Bank study includes the six reports that analyzed the growth factors, constraints, and opportunities for each country and a regional report that examines themes common to Central America.
