Central America Briefing

IMF says Middle East War to Deepen Regional Divides

1 May 2026

1 May 2026

The Middle Eastern war will likely widen economic issues across Latin America and the Caribbean according to the IMF. In the short-term, oil exporters are likely to see a boost whilst tourism-reliant economies and those that have to import energy are more at risk. The multilateral estimated that the region will grow 2.3% in 2026 and 2.7% in 2027. Central banks have kept inflation in check and growth is mainly going with projections states the IMF’s report on the region.

However, inflation will rise through higher fuel, transport and food costs. Most of the countries to benefit from the war are in South America with export income rising for oil producers. Guyana and Trinidad and Tobago in the Caribbean have seen likewise changes. Central America as an energy import region will face significant issues with the IMF suggesting renewable energy could provide some relief.

Source: Central America Briefing | Vol 14, Issue 9

European Investment Bank Approves €200mn to Honduras Electric Network

17 April 2026

17 April 2026

The European Union and Honduras’s National Electric Energy Company (ENEE) have signed an agreement to modernise the country’s ageing power grid. As part of a broader €1 bn regional investment, the European Investment Bank (EIB) will provide Honduras with a €200 million loan. This funding prioritises the construction and renovation of seven critical transmission lines, selected from twenty-one identified as high-priority. These upgrades are essential to address a 50-year-old infrastructure that has exceeded its lifespan, including the vital Nicaragua interconnection.

Energy Minister Eduardo Oviedo emphasised that ENEE faces US$6.5 bn in investment pressures over the next decade, necessitating private sector involvement. Currently, private firms generate two-thirds of the nation’s electricity. By combining technical assistance with high-tech industrial offers, the EU aims to improve grid reliability and reduce technical losses. This strategic international cooperation represents a vital step toward securing long-term energy sustainability while meeting the country’s rising annual demand.

Source: Central America Briefing | Vol 14, Issue 8

China detaining Panama flagged ships in ongoing commercial conflict

2 April 2026

2 April 2026

The US Federal Maritime Commission (FMC) has reported an unprecedented surge in the detention of Panama-flagged vessels at Chinese ports, with nearly 70 ships held since early March 2026. This aggressive spike in inspections is viewed as a retaliatory move by Beijing following a Panamanian Supreme Court ruling that invalidated port concessions held by the Hong Kong-based conglomerate CK Hutchison.

Following the removal of the Chinese-linked operator, Panama appointed US-affiliated subsidiaries of Maersk and MSC as interim managers, a shift influenced by Washington’s efforts to curb Chinese control over the Panama Canal. FMC Commissioner Laura DiBella suggested these detentions are intended to punish Panama for the asset transfer. Given that Panama-flagged ships carry a significant portion of global trade, the FMC is now investigating whether China’s actions constitute an unfair disruption to international commerce and the strategic waterway that handles 5% of global maritime traffic.

Source: Central America Briefing | Vol 14, Issue 7

IDB forecasts 2.1% growth for region

23 March 2026

23 March 2026

In 2026, Central American economies will show moderate growth, according to the latest IDB forecast. Despite this resilience, the subregion faces fiscal challenges. Panama recently improved its fiscal position through strong income growth, while Guatemala experienced a deterioration driven by higher expenditures but still managed to increase tax revenue by 9.1%. A critical stabilizer for Central America is the steady inflow of remittances. To sustain long-term growth, the region must address low productivity and the need for digital skill development. The IDB plans to invest a record US$500 bn in Latin America and the Caribbean over the next ten years as it recognizes the advances in the reduction of poverty and the decrease in regional risk.

Source: Central America Briefing | Vol 14, Issue 6

BlackRock EQT to acquire AES for US$10.7bn

6 March 2026

6 March 2026

AES has entered into a definitive agreement to be acquired and taken private by a consortium led by BlackRock’s Global Infrastructure Partners (GIP) and EQT Infrastructure, in a transaction valued at US$10.7 billion in equity ($15 per share) and an enterprise value of approximately US$33.4 billion. The acquisition is designed to provide AES with the capital required to expand its clean energy and utility infrastructure beyond 2027 across the Americas, El Salvador and Panama in Central America.

Source: Central America Briefing | Vol 14, Issue 5

IDB agrees US $1.3 bn El Salvador deal

24 February 2026

24 February 2026

IDB President Idan Goldfajn and President Nayib Bukele agreed on a US $1.3 billion deal
for El Salvador. This will allow the country to invest in housing, tourism, health, and
education. In 2025, the IDB authorized over $1,264.7 million in funding for 30 projects in
El Salvador, making the IDB one of El Salvador’s strongest financial allies.

Photo Credit: https://www.instagram.com/p/DPr6kKAj9Xk/

Source: Central America Briefing | Vol 14, Issue 4

Laura Fernández Wins Costa Rica Presidency in First-Round Victory

6 February 2026

6 February 2026

Laura Fernández, the 39-year-old conservative candidate of the ruling Partido Pueblo Soberano, won Costa Rica’s presidential election on 1 February 2026 with approximately 49.6 per cent of the vote, clearing threshold required to avoid a second round and marking a decisive endorsement of the outgoing administration. Fernández also secured a historic legislative majority, winning 31 of 57 seats in the Asamblea Legislativa. The campaign was dominated by citizen anxiety over rising violent crime, which Fernández addressed with proposals for states of exception in high-crime zones and the construction of a high-security mega-prison modelled on El Salvador’s approach. On the economic front, she has signalled her intention to pursue the sale of state assets, advance the delayed electric train project, and deepen Costa Rica’s integration into global value chains. Fernández is due to be inaugurated on 8 May 2026.

Photo Credit: Official Instagram Account of Laura Fernández https://www.instagram.com/laura_fernandez_delgado/?hl=en

Source: Central America Briefing | Vol 14, Issue 3

State of Siege Announced in Guatemala

23 January 2026

23 January 2026

Following disturbances in three prisons linked to changes in privileges, gangs attacked police officers in and around the capital Guatemala City. This resulted in 10 police deaths and caused President Bernardo Arévalo to ask for a State of Siege which restricts some constitutional guarantees for a month. This was passed by Congress the following day. Tension remains high in the prison system with gang leaders reportedly upset at being transferred, losing king size beds, internet and restaurant food.

Source: Central America Briefing | Vol 14, Issue 2

Honduran Transition Stalled, Nasry Picking Cabinet

9 January 2026

9 January 2026

With two weeks to go before the handover of power in Honduras, following a disputed and close election, Nasry Asfura continued to pick his cabinet. This was before the president-elect departed for his first official trip to the US and Israel. One name being touted for the foreign ministry is Mireya Agüero de Corrales who previously held the position from 2013-2014. According to officials most of the cabinet will be new faces and Asfura has already decided on its makeup. Meanwhile, Honduras’s Congress is attempting to convene a hearing to determine whether to accept the election result or demand a total recount.

Source: Central America Briefing | Vol 14, Issue 1

Photo Credit: https://www.facebook.com/papialaorden/