The economies of central America have been growing rapidly since the end of the pandemic. Some of this is the natural rebound of economic activity among countries that have outsized tourist sectors; and increased spending in this sector is one of the leading themes of the past couple of years.
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However, there is a lot more going on. The nearshoring trend – with North American companies searching for sources of products and services closer to home – has become a strong tailwind for many of these economies. Lower energy prices have also provided a better cost base for economic development and some countries, such as the Dominican Republic, have put together such strong decades-plus growth that they are nearing developed market status.
The region has also developed a geopolitical story, with China focusing on strengthening economic and trade ties with it.