Central America Briefing

CAF to Allocate US$40bn to LatAm Sustainable Projects

21 November 2025

21 November 2025

Over the next five years, the Development Bank of Latin America and the Caribbean (CAF) has announced a US$40bn investment in sustainable growth and promotion of climate action. This includes energy transition, water security, sustainable mobility, agricultural prosperity and conserving key ecosystems on the planet from the Amazon to mangroves. To achieve this CAF will use a variety of financial tools from project financing, promoting sustainable public policies, green credit lines, debt-for-nature swaps and sustainability loans. As well as working with local governments to ensure financing gets to the people that need it. The announcement was made at the CELAC-EU Summit in Santa Marta and ties in with COP 30 and the EU Global Gateway initiative.

Source: Central America Briefing | Vol 13, Issue 21

BAC Plan to Buy Panama’s Multibank

7 November 2025

7 November 2025

BAC International Corp. (BIC) has revealed plans to purchase Multibank in Panama, a move that would make it the largest bank in Central America by market share. The purchase is subject to approval by the respective banks’ directors, shareholders and regulatory authorities. It would give BAC US$43bn in assets, US$30bn in loan portfolio and US$32bn in deposits and place them in the top three banks in Panama. BAC has over six million customers across Central America and is perhaps best known for its commitment to sustainability.

Source: Central America Briefing | Vol 13, Issue 20

World Bank Predicts Guatemala and Panama to lead Regional Growth

10 October 2025

10 October 2025

World Bank forecasts for 2025 predict that Guatemala and Panama will lead Central American growth in 2025 with 3.9% GDP each. Costa Rica will be third with 3.6%, Honduras 3.5%, Nicaragua 3.1% and El Salvador with 2.5%. Countries that are included in the report due to them being part of the Central American Integration System (SICA) are the Dominican Republic which has had years of double digit growth dropping to 3% and Belize improving its GDP by 1.5%. The Dominican Republic is expected to bounce back in 2026 and 2027 to lead the region with Panama not far behind (4.3% and 4.1% respectively). Overall for the region the World Bank estimates regional economic growth as 2.3% in 2025 and 2.5% in 2026. The World Bank chief economist for the region, William Maloney expects a slight improvement in Latin America but against a more challenging global economic backdrop.

Source: Central America Briefing | Vol 13, Issue 18

FIFCO Agrees US$3.25bn Regional Deal with Heineken

26 September 2025

26 September 2025

Florida Ice and Farm Company (FIFCO) agreed a US$3.25bn deal with Heineken to sell the remaining 75% of its stake in Distribuidora La Florida SA. This will include food and beverage operations in Costa Rica and Guatemala, a beverage business in Mexico and stakes in beer companies in Nicaragua and Panama. FIFCO México SA, Nicaraguan Brewing Holding (NBH) SA, Inversiones Cerveceras Centroamericanas SA (INCECA) Compañía Cervecera de Nicaragua and Cervecería Panamá SA are the beverage businesses at stake. It also includes the Musmanni bakery franchise and MUSI convenience store chain. The Dutch giants have held a 25% stake in FIFCO since 2002.

Source: Central America Briefing | Vol 13, Issue 17

“Not Best Time for Central American Integration” – El Salvador VP

12 September 2025

12 September 2025

El Salvador Vice President Félix Ulloa believes it is not the best time to talk about regional integration given that a new Sistema para la Integración Centroamericana (SICA) general secretary has not been agreed upon. Nicaraguan lawyer Werner Vargas resigned in November 2023, having been elected for the 2022-2026 period. Since then, countries have been unable to agree upon a successor. Ulloa also criticised Parlacen, the Central American Parliament which El Salvador recently announced it would withdraw from. Nicaragua also withdrew from the Central American Court of Justice. El Salvador proposed plans to make Parlacen part of a European Union integration.

Source: Central America Briefing | Vol 13, Issue 16

Region Attracts US$3.12b in FDI in Q1 2025

1 August 2025

01 August 2025

Central America attracted US$3.12b in Foreign Direct Investment in the first quarter of 2025, a 2.8% increase year-on-year. The biggest winner was El Salvador with US$322m in investment, 65% more than in 2024. Conversely, Panama suffered the greatest loss with US$526m, 51% less than the previous year. With US$921 in FDI, Costa Rica received the most but this was still a 25% drop compared to 2024. According to the Costa Rica Central Bank, 70% of FDI came from the US with medical devices remaining the most important sector. Free trade zones, perhaps suffering due to stalled infrastructure improvements, saw the biggest declines in FDI. Across the region, financial intermediation, manufacturing and trade were areas of biggest increases. Arguments that some countries need to diversify and strengthen regulatory frameworks are backed up by Guatemala’s attempt to pass anti-money laundering legislation. FDI in Latin America and the Caribbean reached US$188.96 billion in 2024, a 7.1% increase over the previous year according to an Economic Commission for Latin America and the Caribbean (ECLAC) report.

Source: Central America Briefing | Vol 13, Issue 15

Remittance Tax to Impact Central America and Mexico most

18 July 2025

18 July 2025

With the US Senate having agreed to a 1% remittance tax in the Big Beautiful Bill Act, regional countries are counting the cost of its implementation with questions on oversight and mechanics. The Guatemala Central Bank, Banguat, calculates an impact of US$200-225m, Honduras has estimated the tax will cost the country US$100m. In May, 92% of Salvadoran remittances came from the US amounting to US$3.58bn, an increase of 16.8% year-on-year. The Centre for Global Development suggests that remittances will fall by 1.6% with Mexico, India and Central America the most affected.

Source: Central America Briefing | Vol 13, Issue 14

US Senate Approves 1% Remittance Tax

3 July 2025

3 July 2025

The One Big Beautiful Bill Act passed 51-50 in the US Senate with a 1% tax on remittances and substantial changes made to where it will apply. Originally starting at 5%, it was first reduced to 3.5% then 1% with countries like Honduras estimating the cost at US$500mn a year. The tax will only be applicable on cash, money orders or cashier’s cheques. Despite its limitations, experts warn it could be a setback for financial inclusion. This includes increased oversight of remittance companies and mandatory use of federally supervised channels. The effect this may have on access to financial services remains to be seen.

Source: Central America Briefing | Vol 13, Issue 13

Protests continue in Panama, Bocas del Toro Cut off

13 June 2025

Panama’s two-month long strike continues with teachers voting to maintain industrial action and residents claiming police overreacted in altercations across the country. The province of Azuero has issued a state of emergency for lack of drinking water whereas Bocas del Toro sees at least 20 roads closed despite police operations to reopen them. President Jose Raul Mulino has rejected a revised social security law for the third time and cancelled a trip to France to deal with heightened tension in Bocas del Toro. The province has been cut off from the rest of the country. Talks between banana union members and the National Assembly could see an agreement pass which would debate Law 45 which covers working hours, reopen Bocas del Toro, amend Law 45 and open discussions between the National Assembly and Chiquita Panama. The company had announced a further 1,600 job losses bringing the total to over 6,000 workers.