Caribbean & Central America - January 2026

Xiomara Castro’s presidential term ended in Honduras on 27 January. Her successor, Nasry Asfura of the opposition Partido Nacional (PN), inherits a complex security situation, despite Castro’s claims to have improved key metrics, as the first piece in this January 2026 edition of the Latin American Regional Report: Caribbean & Central America explores.

We then turn to Panama where in late November President José Raúl Mulino revealed plans to introduce a new anti-mafia law designed to better combat organised crime, less than two weeks after security services made the biggest cocaine seizure in the country’s history. The next piece looks at Nicaragua where seven supreme court magistrates resigned within a matter of weeks in late November. The departures are in line with a purge of the judiciary by co-president and First Lady Rosario Murillo which began in October 2023.

The following article focuses on Guatemala where a special mission of the Organization of American States paid a visit to observe the selection processes due this year in four key judicial institutions: the attorney general’s office, five-member electoral court (TSE), five-member constitutional court (CC), and comptroller general’s office (CGC). Still focusing on Guatemala, we consider a setback for the government after the 2026 budget approved by congress was suspended by the CC. We then return to Nicaragua where on 10 December the Office of the US Trade Representative (USTR) announced phased-in tariffs on Nicaraguan imports. The final focus piece on Central America ends in El Salvador where President Nayib Bukele has revealed a partnership with artificial intelligence firm xAI to use AI tools in public schools across the country.

Turning to the Caribbean, we begin in St Vincent and the Grenadines where in late November, the electorate voted out Ralph Gonsalves, long-time leader of the Unity Labour Party (ULP) and prime minister for 24 years. A second electoral piece considers elections held in St Lucia in December which awarded a second term to the Saint Lucia Labour Party (SLP) and Prime Minister Philip Pierre.

We then focus on Cuba where the government devalued the peso by creating a third exchange rate, which, along with the increasing dollarisation of the economy, it described as a temporary stabilising measure. The following article looks at Haiti where the country’s economic performance might be poor but a 26 November report by the International Monetary Fund suggests economic recovery could be in the making. The final focus pieces ends with a review of the latest (December 2025) growth forecast for the Caribbean from the United Nations Economic Commission for Latin America and the Caribbean.