Costa Rica, El Salvador, Guatemala, Nicaragua and the Dominican Republic have already reached the 2019 level of economic activity. However, while Panama is expected to record the highest growth on the continent in 2021, its output would not reach its pre-pandemic levels until late 2022 or 2023, due to the economic impact of the severe confinement of 2020. Belize has experienced a solid rebound, but would return to its pre-pandemic production level between 2022 and 2023 because of its high dependence on the tourism sector, as would Honduras, which was the country hardest hit by the hurricanes.

Employment recovers slowly

While 2021 was a year of recovery for the region, employment has been recovering at a slower pace than economic activity. This is due in part to the fact that sectors with the greatest potential for employment generation, such as the construction, hotel and commercial sectors, have lagged behind other less labor-intensive sectors, such as manufacturing, telecommunications, energy and agriculture. This situation has affected informal and lower-skilled workers, such as women and young people, to a greater extent.

To generate quality jobs, the IDB Group has focused on supporting the productive development of MSMEs, which represent 99% of the companies in the region and provide between 65% and 70% of the employment of the economically active population, through the promotion of exports, market access and financing of the productive fabric, with an emphasis on the incorporation of small rural producers in the main value chains.

In the period 2020-2021, the IDB Group mobilized $5.634 billion in support to the region to face the challenges of the pandemic, contributing not only to the immediate health response and care for vulnerable populations, but also to support the productive fabric and employment, as well as interventions aimed at economic recovery in the face of the pandemic.

In 2021, the IDB Group approved $3.377 billion for the countries of Central America and the Dominican Republic. This financing was more than 20% higher than the average approvals for the 2016-2019 period due to increased private sector participation, which in 2021 accounted for 35% of the approved volume.

The IDB continued to support the response to the COVID-19 crisis, while promoting recovery initiatives in the region in areas such as competitiveness, the digital agenda, financing for MSMEs, fiscal management, social investment and agricultural innovation, and food security.

IDB Invest, the IDB Group's private sector investment arm, focused on supporting the productive fabric and employment, especially SMEs and their value chains, as well as facilitating foreign trade. IDB Lab, the IDB Group's innovation laboratory, focused its support on the use of sustainable agricultural technologies and practices, ecotourism, financial inclusion, training and employment.