LatinNews Daily - 27 April 2021

In brief: WB suggests how Central America can boost economies

* The World Bank (WB) has released a new report suggesting a series of reforms for Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama to boost their economies which have been badly hit by the impact of the coronavirus (Covid-19) pandemic and hurricanes 'Eta' and 'Iota'. In January 2021 the WB forecast that Honduras’s GDP shrank by 9.7% last year, followed by Panama (-8.1%), El Salvador (-7.2%), Nicaragua (-6.0%), Costa Rica (4.8%), and Guatemala (-3.5%). The proposed reforms include “reducing costs and barriers to trade [the study estimates tariff-equivalent trade costs at 74%]; boosting investment in human capital, innovation, and physical and digital infrastructure; attracting private investment through improving business environment and the quality of institutions, and a greater inclusion of women and young people in the labour market”. The WB report also warns that between 2019 and 2021, public debt is estimated to rise by 16 percentage points in El Salvador and Costa Rica; by 12-13 percentage points in Honduras and Panama; and by seven percentage points in Nicaragua and Guatemala. Thus, in 2021 public debt is forecasted to reach around 89% of GDP in El Salvador; 75% in Costa Rica; 55% to 65% in Honduras, Panama, and Nicaragua; and 34% in Guatemala.