Image by hannazasimova on Freepik

It’s all about trade relations between the EU and Central America

The trade pillar of the EU-Central America Association Agreement has been provisionally applied since 1 August 2013 with Honduras, Nicaragua and Panama, since 1 October 2013 with Costa Rica and El Salvador, and since 1 December 2013 with Guatemala. It reduces tariffs and increases the efficiency of customs procedures.

The EU and Central America have maintained close and comprehensive relations for a long time. As an EU exporter or importer, you can take advantage of the relationship between the two regions to benefit your business.The most significant imports from Central America are foodstuffs such as fruit (e.g. bananas, pineapples), sugar, animal or vegetable fats and oils (mainly palm oil), coffee beverages, and medical instruments. In terms of EU exports to Central America, significant product groups include pharmaceutical products, machinery and appliances, as well as transport equipment.

What are the benefits for your business? Well, the EU-Central America Association Agreement makes it easier and cheaper for EU traders to import from, and export to Central America. It also eliminates most import tariffs and improves access to government procurement and investment markets and it creates a more predictable environment for trade in Central America, with a mediation mechanism for non-tariff barriers and a bilateral dispute settlement mechanisms.

As many power and market shifts are occurring on a global scale right now, why should entrepreneurs and investors not be looking for new business opportunities in other parts of the world. Perhaps, 2023 is the right moment to consider some international expansion in Central America, a region with an overall market potential of over 45 million consumers. As a Chamber of Commerce, it is our mission, in cooperation with all Ambassadors, to provide Belgian entrepreneurs, companies and potential investors with in-depth information from reliable sources about possible sector related projects in these countries. In addition, we make it a point of honour to put those interested, in direct contact with the owners and decision makers of these projects. So, if you want to find out more about what Euracen can do for you, do not hesitate to give us a call. The "no" you have, the "yes" you can get!

Wish you all a safe and interesting month of February!

Вudgеt ѕреесh

Ву Ааrоn Нumеѕ

Gоvеrnmеnt соuntѕ оn lоwеr іnflаtіоn, sеtѕ оut рrіоrіtіеѕ fоr nеw fіnаnсіаl уеаr: “wе wіll dо mоrе аnd bе ехtrа fоr Bеlіzе”

Тhе Міnіѕtrу оf Fіnаnсе рrојесtѕ mоrе thаn $1.4 bіllіоn іn rеvеnuеѕ аlоng wіth lоаn аnd grаnt fundѕ tо bе соllесtеd іn thе nеw Вudgеt, wіth $1.496 bіllіоn ехресtеd tо bе ѕреnt.

Рrіmе Міnіѕtеr Јоhn Вrісеñо rеіtеrаtеd thе Gоvеrnmеnt’ѕ рlаnѕ tо unfrееzе іnсrеmеntѕ fоr рublіс оffісеrѕ аnd tеасhеrѕ, whісh іѕ іnсludеd іn thе rесurrеnt rеvеnuе оf $1.12 bіllіоn. $383.4 mіllіоn wіll bе ѕреnt оn саріtаl іnvеѕtmеntѕ аnd $108 mіllіоn оn dеbt rерауmеntѕ. Тhе рrіmаrу ѕurрluѕ іѕ ехресtеd tо bе $24.3 mіllіоn, dоwn frоm аbоut $31 mіllіоn lаѕt уеаr, whіlе аvеrаgе іnflаtіоn іѕ ехресtеd tо ѕlоw tо 4.1 реrсеnt, whеrе іt wаѕ nеаrlу 7 реrсеnt lаѕt уеаr. Тhе оvеrаll dеfісіt іѕ $88.1 mіllіоn оr 1.41 реrсеnt оf GDР, whісh іѕ рrојесtеd аt $6.235 bіllіоn.

Тhе gоvеrnmеnt wіll соvеr Вudgеt fіnаnсіng оf $212 mіllіоn frоm оutѕtаndіng lоаnѕ ($128 mіllіоn), grаntѕ ($30 mіllіоn), аnd dоmеѕtіс fіnаnсіng ($54 mіllіоn). Вut thе Gоvеrnmеnt’ѕ рrіоrіtу аrеаѕ hаvе nоt сhаngеd. Іnfrаѕtruсturе рrојесtѕ wіll соntіnuе соuntrуwіdе; ѕuрроrt wіll bе gіvеn tо thе frее еduсаtіоn рrоgrаm іn Ѕоuthѕіdе Веlіzе Сіtу аnd Тоlеdо Dіѕtrісt; Оrаngе Wаlk rеѕіdеntѕ wіll ѕее thе ехраnѕіоn оf thе Nаtіоnаl Неаlth Іnѕurаnсе ѕсhеmе (NНІ); munісіраlіtіеѕ wіll rесеіvе $3 mіllіоn іn fundѕ fоr іmрrоvіng ѕtrееtѕ аnd drаіnѕ; $5 mіllіоn wіll fund thе rесruіtmеnt оf аnоthеr 225 rесruіtѕ fоr thе Веlіzе Роlісе Dераrtmеnt, 110 rесruіtѕ fоr thе Веlіzе Dеfеnсе Fоrсе (ВDF) аnd 60 fоr thе Соаѕt Guаrd, аnd ѕuрроrt fоr thе Fіnаnсіаl Іntеllіgеnсе Unіt (FІU) іnсludіng thе еѕtаblіѕhmеnt оf а Сіvіl Аѕѕеt Rесоvеrу Unіt.

Вrісеnо аlѕо ѕроkе оf а саmраіgn tо рrоmоtе Веlіzеаn-mаdе рrоduсtѕ соmраrеd tо іmроrtеd оnеѕ аnd ѕuрроrtіng mісrо, ѕmаll аnd mеdіum еntеrрrіѕеѕ (МЅМЕѕ) аѕ wеll аѕ thе рlаnnеd dіgіtіzаtіоn оf thе Lаndѕ аnd Сіvіl Rеgіѕtrіеѕ. Тhе Вudgеt wіll bе dеbаtеd fоr thе fіrѕt tіmе асrоѕѕ thrее dауѕ – Маrсh 22 tо 24, Wеdnеѕdау tо Frіdау, аlоng wіth оthеr bіllѕ.

https://www.breakingbelizenews...

Cooperative in Guanacaste Promotes Project to Generate Electricity from Solid Waste

Project is the first in Central America that would use non-valuable solid waste to generate electricity

Imagine creating electricity with shells, leaves, tires, stereophone and even toilet paper? A project of the Cooperativa de Electrificación Rural de Guanacaste R.L. (Coopeguanacaste) plans to do so. The initiative includes the construction of a plant to be located in Palestina de Belén, in Carrillo Guanacaste, and it will be the first in Costa Rica and Central America to generate electricity with this material.

The deadline for approving the project ended on February 1, after four years of proceedings without progress, and a proposal to extend the discussion for another four years was rejected. With 41 votes against, 11 in favor and one absence, the Legislative Assembly buried the bill in the archives, which caused dismay among the deputies who wanted Costa Rica to approve the Agreement.

It is estimated that with the garbage from the neighbors of Liberia, Carrillo, Hojancha and Nicoya, the plant will receive 150 tons of ordinary solid waste per day, which would be transformed into 7.7 and 9 megawatts per hour. “To produce energy from biomass, the waste enters a furnace between 1,200° and 1,500°. Through gasification it is transformed into steam. In a closed cycle, this steam enters a turbine at high pressure where mechanical energy is made in motion and transformed into electrical energy through a generator”, explained Erick Herra, Coopeguanacaste generation and projects manager.

Project means a renewable and abundant source of electricity
According to the cooperative, biomass energy produces several advantages in the environment. For example, it is a renewable and abundant source of electricity, because there is always non-recoverable waste. Likewise, during the pyrolytic gasification process, an inert residue is generated, which will be given a second use, such as for the manufacture of paving stones for streets, or for the construction of malls.The plant will also increase the useful life of sanitary landfills in the municipalities of Nicoya, Carrillo, Hojancha and Liberia. Coopeguanacaste is choosing the technology that will be used, since they already have the approval of the National Environmental Technical Secretariat (SETENA).

Growing interest in Dominican Republic from foreign investors

Central Bank authorities and AIRD executives during a meeting.

During a meeting with AIRD executives, Central Bank Governor affirms the country’s attractiveness due to its resilience and certainty regarding the economy’s performance. The governor of the Central Bank of the Dominican Republic (BCRD), Héctor Valdez Albizu, reported that there is a growing interest on the part of international corporations and investors in the Dominican Republic, ‘attracted by our resilience, the certainty about the performance of the economy and the possibilities of yield for their investments.’

Valdez Albizu spoke at a meeting with the Association of Industries of the Dominican Republic (AIRD), where the president of this entity, Julio Virgilio Brache, praised the measures taken by the Central Bank since the outbreak of the pandemic until today, ‘thanks to which an enviable economic stability has been achieved in the region.’

Valdez Albizu highlighted the stability of the exchange rate, considering that the accumulated appreciation as of December 30, 2022, was 2.0 %. In addition, international reserves reached a historical figure at the end of last year of US$14,440.6 million, equivalent to 5.6 months of imports and 12.8 percent of the gross domestic product (GDP).

He expressed his optimism about the prospects for the Dominican economy in 2023, noting that ‘the result of 4.9% economic growth in 2022 in the context of a delicate international situation like the current one, just out of a global crisis caused by covid-19, and with adverse atmospheric phenomena that affected agriculture, can be considered a success’.

He also referred to the forecasts of the BCRD for 2023, following the estimates of international organizations such as the International Monetary Fund (IMF), the World Bank (WB), and the Economic Commission for Latin America and the Caribbean (ECLAC), that the growth of the Dominican economy would reach a figure of around 4.5 percent.

He also referred to the Central Bank’s forecasts regarding inflation, which ‘we think will converge this year within the target range of 4+/-1 %, as the monetary policy transmission mechanism continues to operate and the conjunctural factors that have affected the volatile component of prices, mainly the effects of climatic phenomena and the drop in the prices of containers and commodities, dissipate’.

He highlighted that the inter-annual consumer price index (CPI) stood at the end of 2022 at 7.83%, 181 basis points lower from a peak of 9.64% in April of that year, being especially relevant to the underlying inflation data for price stability, which stood at 6.56% as of December, a figure that distinguishes the Dominican Republic in comparison with other countries in the region”.

He pointed out the importance of the fact that the monetary policy rate has remained at 8.50% per annum for about three months, indicating a pause at a time when almost all Latin American central banks have increased their rates, placing them significantly above pre-pandemic levels, as is the case of Argentina (75%), Brazil (13.75%), Colombia (12.75%), Uruguay (11.50%), Chile (11.25%), Mexico (10.50%), or Costa Rica (9%).

IMF lays out crypto action plan, recommends against legal tender status

The International Monetary Fund has laid out a nine-point action plan for how countries should treat crypto assets, with point number one a plea not to give cryptocurrencies such as bitcoin legal tender status.

The global lender of last resort said its Executive Board had discussed a paper, "Elements of Effective Policies for Crypto Assets," that provided "guidance to IMF member countries on key elements of an appropriate policy response to crypto assets." Such efforts have become a priority for authorities, the fund said, after the collapse of a number of crypto exchanges and assets over the last couple of years, adding that doing nothing was now "untenable".

The top recommendation was to "safeguard monetary sovereignty and stability by strengthening monetary policy frameworks and do not grant crypto assets official currency or legal tender status." The IMF had hit out at El Salvador in late 2021 when the central American country became the first to adopt bitcoin as legal tender, a move that has since been copied by Central African Republic.

Other advice on Thursday's list, which comes as G20 decision makers meet in India, included guarding against excessive capital flows, adopting unambiguous tax rules and laws around crypto assets, and developing and enforcing oversight requirements for all crypto market actors. Countries should also establish international arrangements to enhance supervision and enforce regulations, the IMF added, as well as set up ways to monitor crypto's impact on the stability of the global monetary system.

Outlining its Executive Board's assessment, the IMF said directors welcomed the proposals and agreed the widespread adoption of crypto assets "could undermine the effectiveness of monetary policy, circumvent capital flow management measures, and exacerbate fiscal risks."

They "generally agreed," too, that crypto assets should not be granted official currency or legal tender status, and though strict bans of assets are "not the first-best option," a few directors thought they should not be ruled out.

See also:
https://economictimes.indiatim...

SCIENCE

Explore Guatemala’s volcanoes and cloud forests for the adventure of a lifetime

By Nichola Daunton

Courtesy The Independent

Whether you want to hike a volcano, swim in Latin America’s deepest lake, or hunt for a bird that inspired a currency, Guatemala has it all. Considered a megadiverse country because of the richness of its nature - it’s home to thousands of plant species, many of which can only be found within its borders - making the ‘place of many trees’ a once-in-a-lifetime destination.

What is the only Central American country with a majority Indigenous community?
Located in the Central American region, just below Mexico and bordered by Belize, Honduras and El Salvador, the country has Pacific and Caribbean coastlines, and its borders are packed with dense forests, lakes, mountains and volcanoes. As well as being ecologically rich, Guatemala is culturally rich too. The majority of its population are of Indigenous Mayan descent, with 21 different Mayan communities making Guatemala the only Central American country with a majority Indigenous community. With so much on offer it can be hard to know where to start. So whether you want to explore the dense forest and ancient Mayan ruins of Tikal or get to grips with the country’s volcanoes, here are some of our favourite things to do in this Central American marvel.

Can I climb a volcano in Guatemala?
Guatemala’s volcanoes tower over the intricate landscapes below, creating the perfect climate for cloud forests - a delicate ecosystem where mountains and rainforests meet. As well as being damp environments thanks to the clouds, these forests are also super diverse, with orchids and bromeliads bursting from the sides of trees.

All this diversity makes for an amazing hike. “The landscapes are beautiful,” says Ana Yancy Rodríguez, the General Director of the Guatemalan Institute of Tourism. “We are surrounded by volcanoes, we have 37 volcanoes, including three active volcanoes where you can have the experience of climbing a volcano and seeing the lava.”

The view from Acatenango of Fuego, GuatemalaCanva

Guatemala’s most renowned volcano hike is Acatenango, which offers travellers some epic views of the surrounding mountain chain. The peak sits at a height of 3,976 metres, so don’t expect to walk it in an afternoon. Hikes are generally two days long, and may involve some overnight travel. On the way up you’ll pass through cloud forest, alpine forest and enjoy panoramic views of Fuego, a neighbouring active volcano

Honduras country strategic plan (2023–2027)

With the support of the WFP (World Food Programme) and partners, the Government has made significant progress towards Sustainable Development Goals 2 and 17, such as by improving food security (measured by the prevalence of underfeeding) from 2014 to 2018; developing a national pathway for food systems transformation as called for at the 2021 United Nations food systems summit; and recently signing a declaration of commitment for the global school meals coalition established at the summit. WFP has promoted capacity strengthening for national systems linked to emergency preparedness and response, climate resilience, school feeding and support for nutritionally vulnerable groups.

Honduras is a lower-middle-income country that has had sustained economic growth for the last two decades; however, high poverty rates, extensive income inequality and risks such as crime and climate variability threaten peace and humanitarian aid efforts and hinder mid-to-long-term initiatives, affecting development gains and causing human capital drain through migration. These issues pose challenges to diverse populations, particularly women, girls and indigenous and Afro-descendant groups, who are already vulnerable to food insecurity in a country with high stunting levels, limited dietary diversity, micronutrient deficiencies and rising rates of overweight and obesity. The coronavirus disease 2019 pandemic and two consecutive hurricanes in 2020 aggravated an already fragile situation, putting extra pressure on livelihoods and generating income loss, especially in urban areas, where informal work is widespread and young people lack employment and training opportunities.

WFP will work with the Government of Honduras to tackle the root causes of food insecurity, malnutrition and poverty, contributing to more prosperous and healthier communities in which people can thrive and live safely. To that end, this country strategic plan will contribute to the development of more diverse and resilient rural and urban food systems and livelihoods and strong, well-functioning national social protection and emergency preparedness and response systems that develop and protect human capital and reduce the assistance needs of the most vulnerable populations. The country strategic plan is strongly focused on strengthening the capacity of national and local partners, promoting behaviour change leading to improved diets, advancing gender equality and healthy masculinity and reducing gender-based violence. The country strategic plan will have a nationwide rather than a specific geographic approach, with a larger focus on urban and peri-urban areas than the previous plan.

In line with national priorities and needs and the United Nations sustainable development cooperation framework, the country strategic plan has five outcomes:

➢ Outcome 1: Crisis-affected populations meet their basic food security and nutrition needs before, during and in the aftermath of emergencies and strengthen their resilience and capacity to respond to future climate shocks and other crises, reducing their vulnerability.

➢ Outcome 2: Vulnerable populations in prioritized rural and urban areas, including those recently affected by emergencies, build and strengthen their livelihoods and generate higher, more reliable and steadier incomes, contributing to better food security and nutrition outcomes and sustainable climate-resilient food systems all year round.

➢ Outcome 3: Vulnerable populations in prioritized rural and urban areas have stable and adequate access to comprehensive social protection services and programmes that increase their level of food and nutrition security by 2027, contributing to the development of human capital in Honduras.

➢ Outcome 4: The Government of Honduras further builds and strengthens its national social protection systems and its capacity to design, implement, monitor and evaluate inclusive nutrition- and gender-sensitive shock-responsive social protection policies and programmes, boosting people’s trust in public institutions by 2027.

➢ Outcome 5: Key partners in Honduras benefit from efficient services all year round.

The coordinated work under the five country strategic plan outcomes incorporates a triple nexus approach and strong collaboration with the Government at the national and local levels, as well as with United Nations partners, especially the other Rome-based agencies. Civil society, academia and the private sector will remain key allies throughout plan implementation.

Nicaragua media guide

For most Nicaraguans radio and TV are the main sources of news. There are more than 100 radio stations, many of them in the capital, and several TV networks.

Courtesy Getty images

“However, journalism as a whole is stigmatised," says Reporters Without Borders. The group says journalists face harassment, arbitrary arrest and death threats. Many of the main TV networks favour particular political factions and members of the ruling elite have financial stakes in media outlets, says Freedom House. It says the Ortega administration "engages in systematic efforts to obstruct and discredit media critics". RSF says there is practically no independent media within the country due to the "strong wave of repression that the Daniel Ortega regime launched against opposition politicians, civil organizations and independent media".

There were 4.2 million internet users by July 2022, comprising 63% of the population (source Internetworldstats.com).

• Press
  La Prensa - daily
  Confidencial - weekly
  Nicaragua Investiga - online news site
• Television
  Nicavision Canal 12 - commercial
  Canal 10 - commercial
  Telenica Canal 8 - commercial
  Canal 4 - commercial
  Canal 2 - commercial
• Radio
  Radio Corporacion - commercial
  Radio Mundial - commercial
  Radio Nicaragua - government-owned
  La Sandino - Sandinista-controlled

Environment Ministry moving towards the all-electric fleet.

The project "Comprehensive Strategic Plan for the technical and economic support of the transformation of the current MiAmbiente fleet to 100% electric vehicles-phase I, was awarded by the Ministry of the Environment to the Consortium for Sustainable Mobility Solutions and Panama Energy Efficiency.

This becomes a fundamental step to meet the goals of the National Electric Mobility Strategy (ENME), which indicates that, by 2023, 25%-50% of public fleets will be made up of electric vehicles. Ligia Castro de Doens, national director of Climate Change, indicated that this process opens the way for other institutions to have an advanced process for bidding for similar projects and with the experiences learned by the Ministry of Environment.

The project not only contemplates the acquisition of five electric vehicles in its first phase, but also the preparation of a strategic, technical, and economic study for the transformation in gradual process of the complete fleet of the Ministry of Environment at the national level. A charging platform will be placed that will provide energy obtained from photovoltaic solar panels with four charging stations, which in turn will feed the network of the headquarters of the Ministry of Environment.

Simultaneously with the recently issued Executive Decree No. 51 of February 15, 2023, which regulates Law 295 of April 25, 2022, which encourages electric mobility in land transport, this project is awarded, which the Ministry of Environment includes a Center for Comprehensive Management of Charge, Generation and Energy Storage, with a training, research and innovation plan in Electric Mobility and Efficient Use of Energy within its facilities.

Panama pledged to achieve a reduction in total emissions from the country's energy sector by at least 11.5% by 2030, representing 10 million tons of CO2 equivalent accumulated between 2022-2030, through the implementation of the Strategies of the Energy Transition Agenda. In turn, the entity, together with the Ministry of Energy and other institutions, seeks to accelerate the deployment of electric vehicles and electricity consumption from renewables to meet this goal, for which they are currently working together to execute a project that allows it.

(courtesy FocusEconomics)

Central America and Caribbean Economic Outlook

Above-target inflation, high borrowing costs and weaker momentum in the U.S. economy will exert downward pressure on regional economic growth this year. The evolution of the U.S. labor market—a key source of remittances and tourism—and the depth of the global slowdown are key factors to monitor. Political instability and extreme weather events are further risks.

Central America and Caribbean Inflation

In January, regional inflation cooled to 7.2% (December: 8.6%). Softer inflation in Costa Rica and the Dominican Republic more than offset intensifying price pressures in Guatemala and Cuba. Barring Puerto Rico, inflation will cool across the region this year. That said, it will likely remain above central bank targets in most countries, hurting purchasing power.

Economic Outlook

Annual GDP growth accelerated in Q3 thanks to strong showings by the transportation, retail and hospitality sectors amid a recovery in tourist arrivals and the dwindling impact of Covid-19. In Q4, the economy should have slowed: Tourist arrivals growth waned compared to Q3 and remained 32% below its pre-pandemic level in the quarter. Similarly, annual growth in export revenue softened in Q4 from Q3. That said, the unemployment rate was 5.0% in October, half the rate of the same month of last year, which, along with declining inflation in the quarter, likely boded well for private spending. In early 2023, available data paints an upbeat picture: Price pressures cooled in January, and growth in export revenue rose. Meanwhile, in February, the IMF underlined during its article IV mission that risks to growth and financial stability were tilted to the downside, as the country should focus on lowering its public debt.

Belize Inflation

Inflation softened to 6.6% in January from 6.7% in December, while month-on-month inflation declined at the fastest rate since December 2021. This year, tighter monetary policy and a base effect will soften price pressures. A factor to watch is the depreciation of the U.S. dollar—the Belizean dollar is pegged to the USD—which would increase the cost of imports.

Costa Rica Economic Outlook

After slowing in Q3, growth lost speed again in Q4. Weakening momentum in private spending and exports and a sharper decline in public spending more than outweighed a smaller fall in fixed investment. Elevated inflation, tighter financial conditions and lower external demand weighed on the reading. Turning to Q1, early signs are upbeat. Inflation continued to decelerate in February, reaching a one-year low and benefitting private consumption. Moreover, in January–February, export growth jumped compared to the Q4 average. In other news, IMF funding should aid public spending, while the planned issuance of USD 5 billion in Eurobonds between 2023–2025 bodes well for the government’s short-term funding needs. Moreover, Fitch and S&P Global recently upgraded their credit ratings for Costa Rica to ‘BB-’ and ‘B+’, respectively, citing fiscal position improvements.

Costa Rica Inflation

Inflation decelerated to 5.6% in February (January: 7.7%) on the back of lower price pressures for food and transportation. Softer demand and moderating commodity prices will lead to lower price pressures this year. That said, Costa Rica’s reliance on food and energy imports remains a key upside risk.

Costa Rica Exchange Rate March 2023 (14-Mar-23)

Costa Rica: Colón strengthens further to a level not seen since January 2017 in March. The Costa Rican colón traded at CRC 548 per USD on 10 March, marking a 4.4% appreciation from the same day of the previous month. Meanwhile, the currency was up 7.9% year-to-date and 18.5% year on year. As such, the currency appreciated to a level not seen since January 2017. The appreciation was broadly driven by improvements in the trade balance, decelerating inflation and upgraded credit ratings.

In February, Costa Rica’s trade balance made a notable improvement, with the deficit narrowing to levels not seen since September 2021. An increase in exports throughout the month, coupled with a decline in imports in the same period, supported the currency. Moreover, the government’s fiscal consolidation efforts led to recent rating upgrades from both Fitch Ratings and S&P Global—from B to BB- and from B to B+, respectively—boding well for colón demand via sounder investor sentiment. Furthermore, inflation decelerated notably in February, increasing the colón’s purchasing power.

This recent FX strengthening is the continuation of a longer appreciation cycle, which started in June 2022 and was driven by the Central Bank’s more aggressive monetary policy relative to the Fed, foreign investment in key high-value sectors, a strong tourism revival and new funding from the IMF. Going forward, the colón is likely to lose some ground. While the Central Bank of Costa Rica is projected to cut rates, the Fed is set to continue tightening amid continued upbeat labor market data. This will pressure the colón somewhat by year-end.

On the outlook, analysts at the EIU commented:

“We expect the appreciation of the colón against the US dollar to peter out imminently. Nonetheless, the Eurobond issuance planned for 2023-25 has reduced uncertainty as regards Costa Rica’s ability to meet its external debt obligations. This will help to secure foreign inflows and moderate the rate of depreciation against the US dollar.”

Dominican Republic Economic Outlook

The economy ended 2022 with a bang: Annual economic activity growth accelerated to 3.3% in December. However, the upturn was not enough to pull Q4’s average growth above that of the prior three months. Turning to this year, activity has cooled so far. Economic growth waned to 0.4% year on year in January—the weakest rate in two years—but this was due in no small part to an unfavorable base effect. Moreover, in sequential terms, activity declined at the steepest pace in 33 months in January. More positively, in January–February, price pressures continued to recede and the Central Bank kept rates unchanged. These developments, coupled with remittances increasing at the strongest annual pace in two years during January, should have aided spending. The external sector, meanwhile, fared well at the outset of the year, with tourist arrivals up year on year in January.

Dominican Republic Inflation

In February, inflation cooled to an over two-year low of 6.4% (January: 7.2%). Softer increases in food and transport prices drove the moderation. Slower economic growth, due in part to contractionary monetary policy, will continue to put downward pressure on inflation for the remainder of the year. It will remain above the Central Bank’s 3.0–5.0% target, however.

Dominican Republic Economic Activity January 2023 (7 Mar-23)

Dominican Republic: Economic activity records softest expansion in two years in January. Economic activity grew 0.4% compared to the same month of the previous year in January, which was a deterioration from December’s 3.3% increase. The outturn marked the weakest reading in two years.

Consequently, the trend pointed down, with the annual average growth of economic activity coming in at 4.4%, down from December’s 4.9% reading.

Lastly, on a seasonally adjusted month-on-month basis, activity declined 3.3% in January, below the prior month’s 0.2% increase. January’s contraction was the sharpest since April 2020.

El Salvador Economic Outlook

After losing speed in Q3, annual growth appeared to accelerate in Q4 on the back of improvements in all sectors of the economy except industrial production and housing. Turning to Q1, early signs are mixed. On the positive side, annual remittance growth accelerated significantly in January, boding well for private consumption. That said, still-elevated inflation hit real incomes in January–February, while annual exports growth continued to contract sharply in January. In other news, at a February Article IV IMF staff visit, the Fund suggested that a lending agreement is unlikely in the absence of key policy changes, boding poorly for the country’s access to global capital markets. The country’s use of Bitcoin, the recent approval of a costly pension reform and the loosening of reserve requirements for banks are key vulnerabilities, according to the Fund.

El Salvador Inflation

Inflation moderated to 6.8% in February (January: 7.0%). Dollarization, tighter domestic financial conditions, lower domestic demand growth and a decline in global commodity prices will keep a lid on prices this year. Key factors to watch include oil and food price dynamics.

Guatemala Economic Outlook

Annual GDP growth should have eased slightly in the final quarter of 2022 from Q3. In October–December, accelerating inflation, softer growth in remittances and tumbling merchandise exports will have weighed on the reading. That said, the economic activity index grew at Q3’s average, supported by sustained expansions in the manufacturing, construction and services sectors. In Q1 2023, the economy should be improving. In January–February, remittance growth accelerated from Q4’s average, which, along with the government’s decision to extend the electricity subsidy, should support private spending. Less positively, in January, the annual economic activity index grew at a softer pace from the previous quarter’s expansion, signaling sluggish domestic output. In addition, the Central Bank’s February rate hike will likely stifle investment.

Guatemala Inflation

Price pressures strengthened in February to 9.9% (January: 9.7%) due to a weaker quetzal and higher food inflation. Looking ahead, inflation should ease from current levels in 2023 on lower global commodity prices, higher interest rates and softer domestic demand. Global commodity price fluctuations pose a risk to the outlook.

Honduras Economic Outlook

In the third quarter, GDP expanded at the softest pace since Q1 2021 due to slower private consumption growth and a faster contraction in public spending. Turning to Q4, average economic activity growth more than halved compared to the third quarter amid high inflation and a weaker external environment. Significant losses of momentum were seen in the transport, manufacturing and agricultural sectors. In contrast, growth in the construction and mining and quarrying sectors improved. Moreover, strong remittances growth—amid a robust U.S. labor market—likely propped up private spending. Heading into 2023, remittances expanded by 12.0% in January–February, which should be continuing to bolster households’ budgets in the face of elevated price pressures.

Honduras Inflation

Inflation rose to 9.8% in February from 8.9% in January, far from the Bank’s target range of 3.0–5.0%. Our panelists see inflation cooling this year amid falling commodity prices and a slowing economy. However, inflation will average well above the Bank’s target range. Unanticipated changes in government subsidies and swings in commodity prices are factors to watch.

Nicaragua Economic Outlook

GDP growth slowed in Q3 last year as an acceleration in private consumption was more than offset by slower expansions in public spending and exports, and a stronger contraction in fixed investment. In Q4, despite tighter financial conditions, economic activity accelerated due to improvements in the agriculture, mining, construction and energy sectors. Turning to Q1 this year, early signs are upbeat. Inflation moderated in January, while remittances grew 63% annually, boding well for private spending. In other news, in late February, the government hiked the minimum wage by 10%, likely aiding personal consumption. That said, in early March, it also shuttered the country’s largest business association, boding poorly for investment. Moreover, relations with the West, Brazil and Colombia have worsened over the past month amid criticisms of the government’s crackdown on dissidents.

Nicaragua Inflation

Inflation decelerated to 10.9% in January (December: 11.6%). Meanwhile, the policy rate set by the Central Bank has stood at 7.00% since December. Inflation will decelerate this year as commodity prices moderate and global supply chain disruptions ease. However, local supply difficulties and second-round effects remain upside risks.

Panama Economic Outlook

Annual economic growth likely halved in Q4 from Q3, mainly due to a dwindling post-Covid-19 base effect. Year-on-year growth in tourist arrivals eased to 74.0% in Q4 from 108% in Q3. In addition, Panama Canal activity was dampened by ebbing global trade—the volume of cargo contracted year-on-year in October for the first time since April—as well as the rerouting of U.S. LNG to Europe instead of Asia. More positively, growth in total fuel consumption, a proxy for economic activity, accelerated to 9.3% year on year in October, while softer inflation in the quarter likely supported private consumption. Meanwhile, longstanding concession negotiations regarding the Cobre copper mine came to an end on 8 March. The government will receive a minimum of USD 375 million annually for the next 20 years—a tenfold increase from the previous agreement.

Panama Inflation

Inflation rose to 2.7% in January (December: 2.1%) due to increased price pressures for housing and utilities amid a start-of-year adjustment in bills. In 2023, inflation should remain low by regional standards thanks to dollarization. However, dynamic domestic demand and the removal of fuel subsidies—currently set for 1 April—are upside risks.

Embassy of Belize

Mrs. Gianni Avila has handed her credentials to the King of Belgium and is now officially named Ambassador of Belize for Belgium and the EU in Brussels.

Bd Brand Whitlock 87-93, 6th floor

1200 Brussels

T +32 2 732 62 04

Embassy of Costa Rica

Avenue Louise 489 Louizalaan, 9th floor

1050 Brussels

T +32 2 640 55 41

Embassy of the Dominican Republic and Mission to the European Union

HEM Ambassador Ivan Ogando

Avenue Louise 231, 2nd floor

1050 Brussels

T +32 2 346 49 35

Mrs. Ellen Martínez de Cooreman, Minister Counselor recently joined Mr. Ogando’s team, and so did Mrs. Carla Bordas Portela as an assistant to the Ambassador.

FB: http://www.facebook.com/domini...
Twitter: @domembassybe

Embassy of El Salvador

HEM Ambassador Hiugo Nelson Ortiz Dubon

Rue de la Science 14A Wetenschapsstraat, 2nd floor

1040 Brussels

T +32 2 733 04 85

HE Ambassador Ortiz Dubon is assisted by Mrs. Maria Alejandra Giron, Counsellor

Embassy of Guatemala

HEM Ambassador José Lambour Penalonzo

Avenue Winston Churcill 185 Winston Churchilllaan

1180 Brussels

T +32 2 345 90 58

Ambassador Lambour is assisted by

Dr. Gabriel ORELLANA ZABALZA, Consejero Comercial

T +32 2 340 18 03

Embassy of Honduras

Mrs. Viviane de Pierrefeu has been named Ambassador of Honduras for Belgium, the Netherlands and Luxemburg, the Baltics and Northern countries and as a Permanent Representative to the EU.

Avenue de Cortenbergh 89 Kortenberglaan, 3rd floor

1000 Brussels

T +32 2 734 00 00

Embassy of Nicaragua

HE Ambassador Mrs Zoila Muller Goff

Avenue Wolvendael 55 Wolvendaellaan

1180 Brussels

T +32 2 375 65 00

Embassy of Panama

HE Mrs. Yavel Mireya Francis Lanuza, Ambassador

Avenue Louise 475 Louizalaan, 11th floor

1050 Brussels

T +32 2649 07 29

NextGen Demo seeks circular pioneers

Port of Antwerp-Bruges is launching a second consultation procedure for the plots available within NextGen Demo. This innovation hub is aimed at circular pioneers looking for space and support to test projects before scaling them up to the commercial level.

Innovation hub NextGen Demo seeks circular pioneers

Port of Antwerp-Bruges is launching a second consultation procedure for the plots available within NextGen Demo. This innovation hub is part of NextGen District and is aimed at circular pioneers looking for space and support to test projects before scaling them up to the commercial level. The first consultation process, in late 2021, generated many responses. Based on that input, the offering has now been further refined and tailored to the specific needs of demonstrators.

Who are we looking for?

Port of Antwerp-Bruges is looking for start-ups, scale-ups, spin-off companies or pilot projects that are active in sustainable and innovative chemical and energy technology. There is a focus on technologies within four areas: Waste-to-X (chemicals/fuels), CCU (Carbon Capture & Utilisation), bio-based technologies and storage of renewable energy and hydrogen technologies.

Award procedure

Therefore, on 23 January, a call for circular pioneers to submit their project proposals was launched. This applies to candidates who can start a demonstration immediately, or to candidates who still need limited preparation. After evaluation of the written project proposals and an oral explanation by the candidates, negotiations and decision to award a concession or preparation process will follow, after which the concession agreement or Letter of Intent will be signed.

Putting Europe’s net-zero industry in the lead

Eurochambres position on the Green Deal Industrial Plan:

Eurochambres acknowledges the urgent need to adapt the EU Industry Strategy. The communication by the European Commission on the Green Deal Industry Plan was timely and necessary. Strengthening our own EU industrial location, keeping a fair level playing field for EU member states, and avoiding a zero-sum game with other economic areas in the world is important. Eurochambres calls on the European Commission to ensure fast deployment of the existing EU financial instruments and provide incentives for private investments on green technologies and renewable energies.

Despite the focus of the New Industrial Strategy for Europe in 2021, on the twin transitions, it has not yet began to reap the fruits of its efforts to turn both into an industrial opportunity for Europe. Eurochambres welcomes the communication by the European Commission on the Green Deal Industry Plan.

Eurochambres acknowledges the urgent need to adapt industrial policies and mobilize financing in a predictable, adequate, and timely manner to address this crisis, as well as to ensure that other key competitiveness levers such as the single market and the EU's trade agenda are optimised.

Europe is facing a new wave of "deindustrialization", this time heavily influenced by rising energy prices and imported inflation, further exposing existing challenges. The EU must ensure that it is an attractive manufacturing location. The state aid debate and subsidy race is a double-edged sword, and our top priority must be to preserve the internal market’s level playing field and integrity.

The United States’ recent Inflation Reduction Act (IRA), which includes a $369 billion package in federal subsidies for green technologies and renewable energies, will undoubtedly impact EU businesses. In this respect, we call for swift transatlantic solutions to remedy the detrimental and discriminatory elements of the IRA on European businesses.

Eurochambres welcomes the Commission’s attempt to coordinate the various existing EU financial instruments for a better outcome. We call on the European Commission to ensure fast deployment of the current allocation of EU financing and provide incentives for private investments. The EU Green Industry Plan, REPowerEU, and the revised Temporary Crisis and Transition Framework can help provide a strong anchor to keep investment in the EU.

Eurochambres has always been at the forefront of actions to improve the better regulation agenda. Therefore, the competitiveness check should be a key part of balanced EU decision-making and should be applied in the context of any EU policy and law-making process.

Global Economic Survey 2023 (GES2023) Report

The 2023 Eurochambres Global Economic Survey (GES2023) was conducted during November and December 2022. The survey provides a qualitative assessment for the year ahead of global economic developments, trade and other key policy challenges from a business perspective based on responses from business organisations in countries accounting for around 70% of total world GDP.

Macroeconomic outlook: The slowdown of global economic activity caused by the outbreak of the war in Ukraine, the resulting distortions on energy markets, as well as the lingering impacts of the Covid-19 pandemic, lead the international business community to predict once more a challenging year ahead.

The latest International Monetary Fund (IMF) forecasts for real gross domestic product (GDP) in 2023 were overall much lower than those for 2022, and the deceleration of economic growth is reflected in the participants’ expectations for their own country or region for 2023. These forecasts highlight the important challenges that global businesses continue to face, as, according to the IMF, more than a third of the global economy has contracted in 2022 and is expected to further do so in 2023. A notable deceleration in growth this year is also expected for the US, with the United States Chamber of Commerce seeing growth levels lower than those predicted by the IMF, reaching 0,5% in 2023. Equally, a more pessimistic outlook is expressed for Brazil by the National Confederation of Trade in Goods, Services and Tourism - Brazil with a 0,5% growth, as well as a slight downward projection by the Korea Chamber of Commerce and Industry to 1,8% and the British Chambers of Commerce significantly downgrading UK forecasts to a -1,3% contraction for 2023. The Eurochambres estimate closely follows the IMF estimate for the Euro Area, which has been displaying a decreasing trend since 2021.

Conversely, according to the participants, other countries are finding different ways to relaunch their economies in an overall challenging global outlook for 2023 and register greater optimism than the IMF predictions. This is the case for China, where the loosening of COVID-19 restrictions may contribute to the slightly more optimistic outlook by the China Council for the Promotion of International Trade, predicting 5% growth for China for the year ahead, as well as for Türkiye, where the Union of Chambers and Commodity Exchanges of Türkiye revises 2023 growth expectations upwards by one and a half percentage points to 4,5% compared to the IMF benchmark.

Reflecting this challenging macroeconomic context, most participants in GES2023 expect a drop in business confidence for their country/region in 2023, with only the Gulf region and China indicating greater business confidence.

The overall top challenge for the global economy in 2023 has been identified as prolonged geopolitical tensions or instability. The other top challenges are rising inflation levels caused by soaring food and energy prices, especially highlighted by participants from the US and the UK, as well as a further tightening of global financial conditions. Energy security also appears as an important overall challenge for 2023, most strikingly for the EU.

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