Regional integration strengthens Central America’s resilience and unlocks investment opportunities

The inaugural ‘Central America: Integration, investment and trade opportunities’ report, produced by OMFIF jointly with the Central American Bank for Economic Integration, shows that:

  • New country partners, such as South Korea, are increasing their attention on Central America with various infrastructure projects underway.
  • Central America was the only bloc in Latin America and the Caribbean to experience year-on-year export growth in the first quarter of 2020.
  • The European Union is the region’s most important development partner, contributing 50.3% of total funding for development projects since 2014.
  • Central America’s banking system entered the Covid-19 crisis in a strong position, with financial soundness indicators outperforming minimum international benchmarks.
  • Green transport and energy infrastructure lead sustainable investment opportunities in the region, such as the development of an electric train in Costa Rica.

The report aims to highlight the region’s potential by identifying growth opportunities and evaluating countries based on quantitative and qualitative indicators that are important to foreign investors.

Despite global economic and social challenges, Central America is forecast to have one of the strongest rebounds in Latin America and the Caribbean, supported by the agility and responsiveness of individual economies in coping with the pandemic’s disruptions.

The report covers eight countries: Belize, Costa Rica, the Dominican Republic, El Salvador, Honduras, Guatemala, Nicaragua and Panama. It presents a wide-ranging view of the region through five pillars: a macroeconomic overview; commerce, external trade and foreign direct investment; integration; finance, tax and transparency; and sustainable investment.

‘This is the first of a series of reports that will share key insights on the region,’ said Dante Mossi, executive president of CABEI. ‘The report is meant to be a tool for anyone who is interested in doing business in Central America.’

Countries’ unified efforts on economic and social integration, institutional strengthening, sustainability and security will be crucial to the region’s ability to overcome this crisis. This work will be essential to chart a sustainable path to long-term growth.

‘Our research highlights that there are significant elements of resilience for Central American economies in the face of the present crisis,’ said OMFIF’s chief economist, Danae Kyriakopoulou. ‘Despite vulnerabilities to external risks stemming from the pandemic and climate change, the macroeconomic fundamentals are strong, and there is important growth potential particularly when it comes to sustainable investment opportunities in infrastructure.’


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