In order to prepare the ground for a more solid post-pandemic recovery, the Secretariat for Central American Economic Integration (SIECA) prepared an analysis on how to boost the region's economies and on the opportunities for resilience offered by the current integration scheme, which is now sixty years old.
The report entitled “Economic recovery in the post-COVID-19 era, economic and trade outlook for Central America 2021”, of the technical-administrative body, is key to the technical support of the governments of Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama.
The document is based on the gradual opening of economic sectors under the implementation of biosecurity protocolsad for the proper management of the health crisis and is framed in a context of post-COVID 19 economic recovery.
It is worth remembering that the Central American countries established this biosecurity protocol with prevention and containment measures, as well as a regional mechanism for preparation, mitigation, response and humanitarian assistance in the event of public health emergencies. The aforementioned protocol seeks to avoid shortages of products in times of crisis and ensure the freedom of transit of goods, border coordination and the proper functioning of platforms supporting intraregional trade.
The report identifies three sections study:
- Perspectives in the international context.
- Dynamism of the regional context.
- Compilation of national and regional measures implemented in response to COVID-19.
It is explained there that, prior to the pandemic, the growth rate of the world economy was already showing a tendency towards deceleration, so the negative effects of the pandemic deepened this imbalance.
It is also noted that the actions taken to safeguard health and prevent the spread of the virus will have diverse effects in countries, with different magnitudes among them, according to estimates by international organizations. The global economic growth outlook estimates a gradual recovery of 6% in 2021, which would be supported by the reduction of uncertainty and the effective containment of the virus.
It is indicated in the text that the The economic sectors most affected by the pandemic restriction measures in Central America were trade, transportation, hotels and restaurants, construction, the financial sector, textiles and manufacturing activities.
The report also explains that the implementation of policy measures in response to the health crisis reflects that the final consumption component of general government at the regional level experienced a growth of 1.4% in the third quarter of 2020 compared to the previous year. In contrast, household final consumption expenditure registered an estimated drop of -4.1% in the third quarter of 2020 compared to the same period in 2019.
In light of this, the new analysis highlights that expectations of economic recovery in the international and regional context are supported by the assumption that economic stimulus actions gradually reduce uncertainty in the markets, in parallel with the effective implementation of vaccination plans. In this regard, the Organisation for Economic Co-operation and Development (OECD, 2020) estimates that efficient vaccination campaigns and coordination between countries for their distribution could accelerate the economic recovery of nations.
In addition to this, SIECA also assesses that intraregional trade is presented as a mechanism with the potentiall to support Central American economic recovery. In that line, The maturity of the economic integration process and the existing regulatory framework can be the basis for Central America have greater resilience to the economic and social effects of the current crisis.
The results of the research “Economic reactivation in the post-COVID-19 era, economic and commercial perspectives for Central America 2021” will be expanded in a Virtual seminar next Thursday, May 27 through the Center for Studies for Economic Integration of SIECA.
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