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Regional Economic Outlook

October 2021 Regional Economic Outlook for Western Hemisphere - Cover

Western Hemisphere

Regional Economic Outlook
October 2024

After successfully weathering a series of shocks, most countries in the region are converging to their (tepid) potential. Growth is expected to moderate in late 2024 and 2025 while inflation is projected to continue easing, although gradually.

With output and inflation gaps mostly closed but monetary policy still contractionary and public finances in need of strengthening, a further rebalancing of the policy mix is necessary. Fiscal consolidation should advance without delay to rebuild buffers while protecting priority public investment and social spending. This would support the normalization of monetary policy and strengthen credibility and resilience of policy frameworks.

Most central banks are well placed to proceed with monetary easing, striking a balance between fending off the risk of reemerging price pressures and avoiding an undue economic contraction.

Medium-term growth is expected to remain close to its low historical average, reflecting long-standing, unresolved challenges—including low investment and productivity growth—and shifting demographics. Worrisomely, the ongoing reform agenda is noticeably thin and could lead to a vicious circle of low growth, social discontent, and populist policies. Avoiding this requires pressing on with reforms. Improving governance—by strengthening the rule of law, enhancing government effectiveness, and tackling crime—is a priority that cuts across all areas of growth. Boosting capital accumulation requires improving the business environment, fostering competition, and increasing international trade. Greater and more effective public investment is also needed. Maintaining a dynamic labor force and increasing productivity requires tackling informality and making formal labor markets more flexible, including to adapt to new technologies. Increasing female labor participation can help boost the labor force and offset demographic shifts.

Read more: Regional Economic Outlook for the Western Hemisphere, October 2024

This web page presents information about the work of the IMF in Central America, Panama and the Dominican Republic, including the activities of the IMF Regional Representative Office. Additional information can be found on the IMF country pages of the enlarged Central American region (Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and Panama), including official IMF reports and Executive Board documents in English and Spanish that deal with Central America as a region and with each of its countries.

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At a Glance

  • CA-7: Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and Dominican Republic
  • Costa Rica Joined the Fund on January 08, 1946
  • El Salvador, Nicaragua, and Panama Joined the Fund on March 14, 1946
  • Dominican Republic and Guatemala Joined the Fund on December 28, 1945
  • Honduras Joined the Fund on December 27, 1945
  • Total Quotas: Net cummulative allocation SDR 1,230.60 Million; Holdings: SDR 1,027.62 Million
  • Loans outstanding: ECF arrangements (Honduras and Nicaragua) SDR 132.54 Million;
  • Stand-by Arrangements (Dominican Republic) SDR 703.76 Million

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IMF's Work on Central America 

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