In Central America and Haiti, movement restrictions and health and social distancing measures to slow the spread of COVID-19 continue to constrain economic activity, cause high levels of informal and formal unemployment – especially in urban areas – and reduce food access for poor urban and rural households. The enforcement and easing of movement restrictions is dynamic, but it is assumed that economic recovery will occur gradually through late 2020/2021 and will depend on the level of restrictions on public transportation and business activity and the spread of the virus. In Nicaragua, the government is not implementing restrictions, though the public is voluntarily restricting their movements.
In Central America, poor households in urban and rural areas are experiencing a reduction or loss of key income sources and face high food prices, leading them to resort to coping strategies to cover their minimum food requirements. Demand for labor, goods, and services remains low and the cost of public transportation remains above-normal due to the impact of the COVID-19 movement restrictions. In rural areas, where the lean season is ongoing until August and agricultural labor demand is seasonally low, white maize and bean prices are above average due to hoarding and price speculation.
In Central America, the Primera and Postrera harvests are expected to be average. However, food prices will most likely remain high and poor households will likely have difficulty accessing work on cash crop and coffee farms due to public transportation restrictions that are expected to persist during the usual peak labor period that begins in October. Although some economic recovery is expected as the economy gradually re-opens, the informal economy and tourism sectors are unlikely to fully recover during the scenario period. Stressed (IPC Phase 2) or Crisis (IPC Phase 3) outcomes are expected from June to January, despite some seasonal improvement in food availability and access.
In Haiti, below-average and irregular rains since late March have reduced crop production prospects, especially for beans and maize, except in areas where irrigation is available. Agricultural labor demand is below normal not only due to poor production, but also because better-off households have earned lower income since the start of the pandemic, which has reduced their capacity to hire labor. At the same time, the closure of the Haiti-Dominican Republic border resulted in a flow of Haitian returnees and an increase in the labor supply along the border. Overall, most poor households face both a reduction in income and purchasing power.
In Haiti, the harvests from July to October are most likely to be below-average despite a forecast of cumulatively above-average rainfall. The HTG is also projected to depreciate against the USD faster than in 2019. Below-average crop production and continued depreciation of the HTG will sustain above-average staple food prices. High staple food prices paired with below-average income are most likely to maintain low food access, which will sustain Crisis (IPC Phase 3) or Stressed (IPC Phase 2) outcomes through January.