According to the Economic Commission for Latin America and the Caribbean (ECLAC) the countries of Central America and the Dominican Republic (CARD) will have an average growth of 4.5% this year, whereas Latin American and the Caribbean together will have average growth of 1.3%.
However, the organization warns that the traditional engine of growth for Central American and the Dominican Republic is under threat in the short and medium term due to the impact of the trade, migration and investment policies by the new United States government with concern for a future reduction in the dynamics of international trade, direct foreign investment and remittances.
On the other hand, the increase in international energy prices and the increase in interest rates is expected to have a negative effect on consumption and investment.
ECLAC is therefore recommending countries to back Central American integration and to diversify markets as well as to strengthen their domestic markets.
Looking at 2016, the reduction in fuel prices and low interest rates have strengthened the macroeconomic position of the CARD countries, with average annual inflation at 2% in 2016, the second lowest figure over the last 25 years.
