JPMorgan Positive on CentAm

The economies of Costa Rica, Guatemala and Panama are keeping the effects of the global slowdown at bay, JPMorgan believes. Costa Rica’s year-to-date surplus stands at 0.8% of estimated GDP and although the Arias administration is warning that by the end of the year there will be a budget deficit equal to 0.5% of GDP, JPMorgan says risks are skewed toward fiscal outperformance. Guatemala’s accumulation of international reserves, which total $4.7bn or 10% of GDP, combined with its low external public debt, equal to 9.1% of estimated GDP, render the country well suited to face the effects of the global financial crisis. Panama’s growth, meanwhile, is expected to be supported by public works on the Canal and other infrastructure projects, keeping GDP growth at 8.5% in 2008 compared to 11.5% in 2007.