Guatemala and Costa Rica Buck Trend

Despite the global economic slowdown, JPMorgan says Costa Rica’s tourism industry is expected to grow by 7.5% in 2008 versus the previous year and Guatemala is expected to post a better-than-expected fiscal deficit of 1.2% of GDP in 2008. Costa Rica’s tourism chamber, says the shop, expects 2.1m visitors by the end of this year, which could translate into more than $2bn in revenues. In 2007, almost 2m tourists generated more than $1.9bn, the chamber says. As for Guatemala, JPMorgan says that although tax revenues declined by 8.9% 1-year average to $310m in November, the year-to-date figures show a 6.3% increase from the first 11 months of 2007. Central American credits tend to be defensive in bear markets, outperforming more liquid higher beta sovereigns on the downside.