US Crisis Affects Central America

10-07-08, 9:40 am

Tegucigalpa, Oct 6 (Prensa Latina) The US financial crisis has increased unemployment, reduced money remittances from abroad and affected Central American exports to that country, despite the Free Trade Agreement, according to the Secretariat of Central American Economic Integration.

The report 'Impact of the US Financial Crisis on Central America,' drawn up by experts of that institution and submitted to the presidents of the region at an extraordinary summit held in this capital on Saturday, says the US crisis has caused direct foreign investment in the region to shrink.

Our major trading partner, the United States, has reported a short- and long-term economic slowdown, and despite that, the region's economy is expected to grow 5.5 percent in 2008, according to the report, which was presented by Honduran Trade Minister Fredy Cerrato and was quoted by the radio station RHN.

Another problem affecting Central America is inflation, which increased to 11.6 percent in May, due to external factors such as high oil and food prices, as a result of a rise in agricultural inputs and speculation in the cereal futures.

Presidents Manuel Zelaya (Honduras), Alvaro Colom (Guatemala), Antonio Saca (El Salvador), Oscar Arias (Costa Rica) and Daniel Ortega (Nicaragua) were warned about a possible reduction of family remittances this year, as opposed to last year's increasing trend.

The report urged the Central American governments to create jobs, boost agricultural production, mainly basic cereals, increase exports and invest in infrastructure.

From Prensa Latina