Weekly Report - 16 March 2004

CENTRAL AMERICA | Regional trade rebounds. After a slight dip in 2002, last year trade between the five core Central American republics rebounded, increasing by 4.5% to just over US$3bn. Guatemala has the biggest slice of the business, 30.5%. Costa Rica and El Salvador follow, almost at par with 25.9% and 25.6%, respectively. Trailing far behind are Honduras (10.4%) and Nicaragua (7.6%).

PANAMA | Growth seen accelerating. Panama's economy will grow this year by about 4.5%, and the medium-term prospect is a rate of 5-7%, according to economy minister Norberto Delgado. He reported last week that the latest figures show Panama's economy growing last year by 4.1%, a result which owed much to the performance of exports, which, after shrinking by 3.4% in 2002, expanded by 8.6%. Best-performing sectors were construction (+28.6%), ports (+20.5%), the Canal (+8.8%). Even the primary activities recorded an unusual expansion of 7%. The big loser was financial intermediation, which after barely growing in 2002 saw activity decrease by 8.1% in 2003.

JAMAICA | Boost from aluminium. Alcoa has announced a US$690m expansion of the JAMALco refinery, which over three years is expected to more than double its production to 2.6m tonnes — and, says the firm, place JAMALco among the world's refineries with the lowest production costs. This scheme comes just after Alcoa completed, last year, a US$115 expansion of the same refinery. The government of Jamaica recently introduced tax incentives for investment in the bauxite sector.

CUBA | Reining in the dollar economy. From April, Cuban state enterprises will no longer be able to accept payment in US dollars for anything but their core business activities. The economy ministry ordered this last week invoking the need to `achieve better use and control of foreign currencies.' Cuba allowed the domestic use of the US dollar in 1993, in tandem with the peso and the convertible peso. Last year it started testing the free use of euros at some tourist resorts.