Central and South America forecast economic recovery

By Caribbean News Global

Costa Rica’s economy shows signs of recovery

Costa Rica’s central bank (BCCR) has published its latest monthly economic activity index (Imae), which showed a 6.6 percent year-on-year decrease in October as a result of the impact of the coronavirus (Covid-19) pandemic – the smallest fall since the start of the pandemic back in March. The sectors most impacted were hotels & restaurants, which registered a 53.2 percent year-on-year decline; transport & storage (-24.3%); and construction (-15.7%). The latest (December) forecast from the United Nations Economic Commission for Latin America and the Caribbean (Eclac) predicted that Costa Rica’s GDP will shrink by a total of 4.8 percent in 2020, less than the 6.5 percent average contraction for Central America.

Brazilian upgrade growth forecast for 2020

Brazilian financial analysts slightly upgraded their growth forecast for 2020, from a 4.41 percent drop in gross domestic product (GDP) to a 4.4 percent drop, the Central Bank of Brazil reported. According to the bank’s weekly survey of 100 of the country’s leading financial groups, analysts downgraded the GDP growth forecast for 2021, from a 3.5 percent expansion in GDP to 3.46 percent.

Brazil’s economy is expected to contract this year due to the impact of the novel coronavirus pandemic, despite seeing a recovery in recent months.

Analysts raised their inflation forecast for this year, from 4.35 percent to 4.39 percent, the ninth consecutive weekly increase, and for next year, modified it from 3.34 percent to 3.37 percent. The benchmark interest rate, which is currently at 2 percent annually, is expected to increase to 3 percent next year.

Brazil’s expected trade surplus was reduced from $US 57.63 billion to $US 56.15 billion in 2020, and from $US 56.5 billion to $US 55.1 billion in 2021.

Mexico poised to rise in tourism rankings

Mexico’s tourism minister, Miguel Torruco Marqués, has said that based on preliminary results from the World Tourism Organization (WTO), covering the first three quarters of 2020, Mexico could become the 3^rd most visited country in the world this year, up from 7^th in 2019, having attracted 25.1 million international arrivals so far in 2020, down from 45 million in the equivalent period in 2019.

Torruco also said that Mexico was poised to rise to 14^th globally in terms of expenditure by international tourists in 2020, up from 16^th in 2019, with US$11.2 billion having been spent in the first three quarters of the year, down from US$24.6 billion in the same period in 2019.

However, Torruco was quick to highlight the context of the coronavirus (Covid-19) pandemic, and the fact that Mexico’s hihger ranking is likely to be temporary: the WTO figures show that tourism arrivals worldwide have fallen by 72 percent in the first three quarters of the year, and tourism spending by 58.7 percent, as a result of the pandemic.

Sources: LatinNews and MercoPress