Economy of Central America

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The Panama Canal is the principal trade route between Central America and the world Panama Canal Gatun Locks.jpg
The Panama Canal is the principal trade route between Central America and the world
Development of real GDP per capita of economies in Central America Development of real GDP per capita in Central America.svg
Development of real GDP per capita of economies in Central America

The economy of Central America is the eleventh-largest economy in Latin America, behind Brazil, Mexico, Argentina and Colombia. According to the World Bank, the nominal GDP of Central America reached 204 billion US dollar in 2010, as recovery from the crisis of 2009, where gross domestic product (GDP) suffered a decline to 3.8%. [1] The major economic sectors are agriculture and tourism, although the industrial sector has shown strong growth, mainly in Panama.

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The U.S. is the main socio-commercial partner of all Central American countries. Other important socio-commercial countries in Central America are the European Union, Japan, Dominican Republic and Mexico. [2] Currently, the Central American bloc is based on a bilateral free trade agreement (FTA) with the United States known as CAFTA-DR, and another in negotiations with Peru. The Panama Canal is the connection of Central America with the rest of the world, and the main means of communication for trade with Central America, South America, United States, Europe and Asia.

The economic development of Central America is the middle level, although competitiveness is remarkable:

Currency by country

Each country has its own national currency, with the exception of El Salvador, where the US dollar was taken as currency in the country as of January 1, 2001, [12] replacing the Salvadoran colón. El Salvador will also make Bitcoin an official currency beginning on September 7, 2021. [13] Belize is a country where the dollar circulates, but of Belizean type. In the case of Panama, two types of currency are in use, the Panamanian balboa and the US dollar. The Balboa is pegged to the US dollar 1:1, is issued only in coin form, and is subdivided into 100 centésimos. For all practical purposes the currency of Panama is the US dollar.

Countries
Official Currency
Flag of Belize.svg  Belize Belizean dollar
Flag of Costa Rica.svg  Costa Rica Colón
Flag of El Salvador.svg  El Salvador US Dollar and Bitcoin
Flag of Guatemala.svg  Guatemala Quetzal
Flag of Honduras (2022-).svg  Honduras Lempira
Flag of Nicaragua.svg  Nicaragua Córdoba
Flag of Panama.svg  Panama Balboa and US dollar

Gross domestic product by country (2012)

Guatemala has the highest gross domestic product in Central America, followed by Panama, Costa Rica and El Salvador. The GDP data are based on data from the World Bank corresponding to 2012. [14] The rates of economic growth come from the CIA World Factbook. [15]

Countries GDP PPP GDP PPP per capita nominal GDPnominal GDP per capita Economic growth (%)
Flag of Belize.svg  Belize $2,754,000,000$8,412$1,520,000,000$4,481+3.00
Flag of Costa Rica.svg  Costa Rica $58,599,000,000$12,558$44,884,000,000$9,500+5.10
Flag of El Salvador.svg  El Salvador $45,980,000,000$7,734$23,985,000,000$4,108+1.90
Flag of Guatemala.svg  Guatemala $78,419,000,000$5,191$50,296,000,000$3,330+3.30
Flag of Honduras (2022-).svg  Honduras $37,670,000,000$4,593$18,180,000,000$2,185+3.30
Flag of Nicaragua.svg  Nicaragua $19,894,000,000$3,336$7,828,000,000$1,291+4.10
Flag of Panama.svg  Panama $67,804,000,000$17,830$36,252,500,000$9,534+10.00

Exports and imports

Regarding exports and imports, the balance is negative in the region, each country consumes more than it produces. The main products that the region exports are agricultural type (cocoa, coffee, rice, flowers, etc.), the largest purchaser is the United States. While on the other hand, the region imports nontraditional products (cars, appliances, electronics, etc.) and the main seller is United States.

Countries
Imports of goods and services (2010)Exports of goods and services (2010)Balance
Flag of Panama.svg  Panama [16] $25,232,000,000$18,106,000,000+$835,000,000
Flag of Costa Rica.svg  Costa Rica [17] $14,010,000,000$12,120,000,000+$120,000,000
Flag of El Salvador.svg  El Salvador [18] $8,234,000,000$9,333,000,000+$135,000,000
Flag of Guatemala.svg  Guatemala [19] $8,135,000,000$8,957,000,000+$130,000,000
Flag of Honduras (2022-).svg  Honduras [20] $7,235,000,000$7,002,000,000+$96,300,000
Flag of Nicaragua.svg  Nicaragua [21] $4,723,000,000$3,366,000,000+$100,500,000

Foreign direct investment

According to the World Bank, Panama, Costa Rica and Guatemala are the countries that receive more foreign direct investment in Central America, and exceeded one billion US dollars. The next table shows the values in dollars, and investment growth between 2010 and 2014: [22]

CountriesForeign investment (2010)Foreign investment (2011)Foreign investment (2012)Foreign investment (2013)Foreign investment (2014)
Flag of Belize.svg  Belize $96,449,877$95,348,525$194,201,409$92,247,731$141,097,030
Flag of Costa Rica.svg  Costa Rica $1,850,664,231$2,141,615,128$2,692,160,896$3,284,494,667$2,345,257,533
Flag of El Salvador.svg  El Salvador $113,160,684$122,500,004$447,709,564$242,345,997$474,801,761
Flag of Guatemala.svg  Guatemala $845,598,200$1,139,659,133$1,263,638,429$1,353,141,908$1,204,670,350
Flag of Honduras (2022-).svg  Honduras $484,836,873$1,042,571,021$1,067,550,208$1,069,029,263
Flag of Nicaragua.svg  Nicaragua $489,900,000$936,300,000$767,658,534$815,500,000$840,000,000
Flag of Panama.svg  Panama $2,549,100,000$4,395,600,000$3,297,100,000$5,053,200,000$5,213,800,000

Banking

Banking is one of the main economic activities in Central America, which takes place mainly in Panama, El Salvador and Costa Rica. Since 2010, Guatemala, Honduras and Nicaragua have developed strong growth of the banking. Regarding financial centers, El Salvador and Panama are the only Central American countries that have a World Trade Center.

The economist magazine American Economy published its ranking "The 250 best banks in Latin America," presented the list of the 42 Central American banks included.

Within the Latin American general ranking, the first Central American Bank is the number 39 in the list, and it is the HSBC Panama in Panama City.

Within the first 100 places in the general ranking of Amperica Economy, 7 Central banks appears: HSBC Panama ranked 39th, General of Panama at 42, National Panama (57), National of Costa Rica (70), Bladex of Panama (75), Agricultural Bank of El Salvador (85) and Costa Rica Bank of Costa Rica (92). [23]

See also

References

  1. GDP growth (annual %) World Bank Data. Retrieved: 25/07/2015.
  2. Relaciones Comerciales entre Centroamérica, Panamá y Japón Archived 2016-03-05 at the Wayback Machine SIECA. July 2013. Retrieved: 25/07/2015.
  3. 1 2 Report for Selected Countries and Subjects International Monetary Fund.
  4. Guatemala Producto Interno Bruto (PIB) IndexMundi sources of the CIA The World Factbook. Retrieved: 25/07/2015.
  5. "FMI calificó como estable la economía de Guatemala". Archived from the original on 2013-04-26. Retrieved 2015-07-26.
  6. Panamá - Índice de Desarrollo Humano - IDH Retrieved: 25/07/2015.
  7. Economía panameña crece al 6,2% Retrieved: 25/07/2015.
  8. Perspectivas del FMI sobre Centroamérica Retrieved: 25/07/2015.
  9. CIA The World Factbook - Honduras Retrieved: 25/07/2015.
  10. Prensa Latinoamericana. Retrieved: 25/07/2015.
  11. UNDP. Retrieved: 25/07/2015.
  12. Archived 2017-08-27 at the Wayback Machine La Prensa Gráfica. Retrieved; 25/07/2015.
  13. "El Salvador, primer país del mundo en reconocer al Bitcoin como moneda de curso legal | Asamblea Legislativa de El Salvador". www.asamblea.gob.sv. Retrieved 2021-06-22.
  14. Gross domestic product 2012, PPP. World Bank. Retrieved: 25/07/2015.
  15. «Country Comparison. GDP - real growth rate», CIA The World Factbook. Retrieved: 25/07/2015.
  16. Balance preliminar de las economías de América Latina y el Caribe • 2010 Panamá. Retrieved: 25/07/2015
  17. Balance preliminar de las economías de América Latina y el Caribe • 2010 Costa Rica. Retrieved: 25/07/2015
  18. Balance preliminar de las economías de América Latina y el Caribe • 2010 El Salvador. Retrieved: 25/07/2015
  19. Balance preliminar de las economías de América Latina y el Caribe • 2010 Guatemala. Retrieved: 25/07/2015
  20. Balance preliminar de las economías de América Latina y el Caribe • 2010 Honduras. Retrieved: 25/07/2015
  21. Balance preliminar de las economías de América Latina y el Caribe • 2010 Nicaragua. Retrieved: 25/07/2015
  22. Inversión extranjera directa por país (2010-2014) Data World Bank. Retrieved: 25/07/2015.
  23. Ranking de Bancos de Centroamérica The Economist magazine American Economy. Retrieved: 25/07/2015.