IMF - Regional Resident Representative Office in Central America, Panama, and the Dominican Republic

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CA-7: Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and Dominican Republic
Costa Rica Joined the Fund on January 08, 1946
El Salvador, Nicaragua, and Panama Joined the Fund on March 14, 1946
Dominican Republic and Guatemala Joined the Fund on December 28, 1945
Honduras Joined the Fund on December 27, 1945
Total Quotas: Net cummulative allocation SDR 1,230.60 Million; Holdings: SDR 1,027.62 Million
Loans outstanding: ECF arrangements (Honduras and Nicaragua) SDR 132.54 Million;
Stand-by Arrangements (Dominican Republic) SDR 703.76 Million

The IMF conducts work in Central America, Panama, and the Dominican Republic through the Regional Resident Representative Office.
Country coverage includes the enlarged Central American region: Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and Panama.
Official IMF reports and Executive Board documents are available in English and Spanish and deal with Central America as a region and with each of its countries.

XVI Annual Regional Conference on Central America, Panama, and Dominican Republic
IMF Seminars, Conferences, Workshops and Economic Forums
Regional Economic Outlook Update for Latin America and the Caribbean — Press Conference by Ilan Goldfajn, Director of the Western Hemisphere Department, IMF, April 2022.

After successfully weathering a series of shocks, most countries in the region are converging to their (tepid) potential.
Growth is expected to moderate in late 2024 and 2025 while inflation is projected to continue easing, although gradually.
With output and inflation gaps mostly closed but monetary policy still contractionary and public finances in need of strengthening, a further rebalancing of the policy mix is necessary.

Key policy messages and recommendations

Fiscal:
- Fiscal consolidation should advance without delay to rebuild buffers while protecting priority public investment and social spending.
- Strengthening public finances would support the normalization of monetary policy and strengthen credibility and resilience of policy frameworks.
Monetary:
- Most central banks are well placed to proceed with monetary easing, striking a balance between fending off the risk of reemerging price pressures and avoiding an undue economic contraction.
Structural reforms:
- Press on with reforms to avoid a vicious circle of low growth, social discontent, and populist policies.
- Improve governance by strengthening the rule of law, enhancing government effectiveness, and tackling crime.
- Boost capital accumulation by improving the business environment, fostering competition, and increasing international trade.
- Increase and make public investment more effective.
- Maintain a dynamic labor force and increase productivity by tackling informality and making formal labor markets more flexible, including to adapt to new technologies.
- Increase female labor participation to help boost the labor force and offset demographic shifts.

Medium-term growth is expected to remain close to its low historical average, reflecting long-standing, unresolved challenges—including low investment and productivity growth—and shifting demographics.
The ongoing reform agenda is noticeably thin, which could lead to a vicious circle of low growth, social discontent, and populist policies unless reforms are advanced.