Central America economic growth projected at 4.2% by IMF

Central American economic trends show varied trajectories according to the International Monetary Fund (IMF). The regional economy is projected to grow by 4.2% in 2026, led by Panama at 5% and El Salvador at 4.5%. Conversely, Costa Rica and Honduras are expected to see lower growth rates of approximately 3.3%.

In Costa Rica, the government has taken significant security and educational steps. President Laura Fernández inaugurated a high-security mega-prison designed to combat drug trafficking, modeled after El Salvador’s security strategies. Simultaneously, the University of Costa Rica is expanding its STEM degree offerings for 2027 to meet regional industrial needs, and the Development Banking System has injected 81.5 billion colones to support local SMEs.

In the Dominican Republic, the construction sector has seen a 7% expansion, driven by a 19.9% increase in building licenses during the first half of 2026. However, research from the University of Santo Domingo indicates that economic growth has not fully addressed labor poverty, which affected 39.7% of the population in 2025.