Two previous reports (Díaz Bonilla, Laborde and Piñeiro, 2021, and Diaz-Bonilla, Flores, Paz, Piñeiro, and Zandstra, 2021) covered the evolution and impacts of the pandemic on food systems in Guatemala until the time of their writing (which together covered from the start of the pandemic in early 2020 until about October 2021. This third report concludes the analysis of the impact of the COVID-19 pandemic on food systems in Guatemala. It summarizes the previous reports and updates the analysis until the end of May 2022. However, this country and its food systems have also been affected by other events since the pandemic started in early 2020. Between 3 and 17 November 2020, tropical storms Eta and Iota hit Guatemalan territory with heavy rains that led to floods and mud landslides, affecting 16 of the country's 22 departments. Later, in 2021 the strong world economic rebound due to expansionary fiscal and monetary policies in the USA and many other developed and developing countries combined with persistent strains on value chains due to COVID19 to lead to increases in transportation costs and the prices of food, energy, and fertilizers. In the case of agricultural products, those increases were com-pounded by adverse climate events in some important producers, particularly in South America. Finally, the Russian-Ukraine Conflict (RUC) on February 24, 2022, has added further pressures on the prices of energy, fertilizers and food products including wheat and vegetable oils. Therefore, the pandemic's specific impact on Guatemala's food systems has been interacting with the other developments mentioned, making it very difficult to differentiate among them. Policymakers, how-ever, need to respond to the overall impact of the conditions affecting the population, whatever the leading causes may be. Therefore, this final report, while emphasizing those aspects linked to the pandemic, will discuss the conditions in Guatemala considering those other factors. This report is structured as follows. First, it summarizes the main policy responses, costs, and financing related to the COVID-19 shock. Second, it brings up to date the evolution of the pandemic, using different indicators. Third, it updates the evolution of key economic and nutritional variables. Fourth, there is a brief discussion of the implications of RUC for food systems.. Fifth, the report continues with a more specific analysis of the evolution of some food value chains that are central for food consumption in Guatemala. The next section discusses policy considerations for health, poverty and nutrition, and food value chains, based on the updated analysis of the previous sections, including cost and financial aspects. A final section concludes.

Two previous reports (Díaz Bonilla, Laborde and Piñeiro, 2021, and Diaz-Bonilla, Flores, Paz, Piñeiro, and Zandstra, 2021) covered the evolution and impacts of the pandemic on food systems in Honduras until the time of their writings (which together cover from the start of the pandemic in early 2020 until October 2021). This third report concludes the assessment of the impact of the COVID-19 pandemic on food systems in Honduras, recapitulating the previous ones and updating the analysis until the end of May 2022. This country and its food systems, however, have been also affected by other events since the pandemic started in early 2020, such as the tropical storms Eta and Iota in November 2020. Subsequently, in 2021 the strong world economic rebound due to expansionary fiscal and monetary policies in the USA and other countries, generated strains on value chains, leading to increases in transportation costs and the prices of food, energy and fertilizers. In the case of agricultural products, those increases were compounded by adverse climate events in some important producing areas, particularly in South America. Finally, the Russian-Ukraine Conflict (RUC) on February 24, 2022, has added further pressures on prices of energy, fertilizers, and some food products (such as wheat and vegetable oils). Therefore, the specific impact of the pandemic on food systems in Honduras has been interacting with the other developments mentioned. From the point of view of policymakers, they need to respond to the overall impact of the conditions affecting the population, whatever the converging main causes may be. Therefore, this final report, while emphasizing those aspects linked to the pandemic will also discuss the overall conditions in Honduras, affected by those many factors. This report is structured as follows. First, it summarizes the main policy responses, costs, and financing related to the COVID-19 shock. Second, it brings up to date the evolution of the pandemic, using different indicators. Third, it updates the evolution of key economic and nutritional variables. Fourth, there is a brief discussion of the implications of RUC for food systems. Fifth, the report continues with a more specific analysis of the evolution of some food value chains that are central to food consumption in Honduras. The next section discusses policy considerations for health, poverty and nutrition, and food value chains, in light of the updated analysis. A final section concludes.

Amid concerns about the beginning of the COVID-19 pandemic, Guatemala, in January 2020 decreed travel bans from China, which were later expanded to other countries. The country had the first confirmed COVID-19 case on March 13 and the first death on March 15. Some days before that, on March 5, the government had declared a “state of calamity” (Declaración del Estado de Calamidad Pública - Decreto Gubernativo Número 5-2020), which allowed the government to limit some activities,1 and to take different actions2 to protect the health and safety of all persons in Guatemala. This document updates a previous report (Díaz Bonilla, Laborde and Piñeiro, 2021) on the impact of the COVID-19 pandemic on food systems in Guatemala. First, it brings up to date the evolution of the pandemic, using different indicators. Second, it summarizes the main policy responses, costs, and financing. Third, it updates the evolution of key economic and nutritional variables up to the time of this writing (June, 2021). Fourth, there is a more detailed analysis of the evolution of some food value chains that are central for food consumption in Guatemala. Fifth, main results for 2021 and 2022 of previous modeling work are briefly presented. A final section discusses policy considerations in light of the updated analysis.

As most countries in the world Guatemala has been affected by COVID-19. In January 2020 the country decreed travel bans from China, which were later expanded to other countries. Still, Guatemala had the first confirmed COVID case in March 13 and the first death in March 15. Some days before that, on March 5, the government had declared the “state of calamity” (Declaración del Estado de Calamidad Pública - Decreto Gubernativo Número 5-2020), which allowed the government to limit different rights, and to take different actions to protect the health and safety of all persons in Guatemala. This brief note covers the following topics until the time of this report. First, it shows the evolution of the pandemic, using different indicators. Second, it summarizes the main policy responses and costs and financing. Third, it shows some actual impacts with available data up to the time of this writing. Fourth, the modeling framework for the simulations is briefly presented. Fifth, the document presents simulations of different scenarios for the evolution of Guatemala’s economy until year 2022. A final section discusses some preliminary policy considerations. Subsequent reports will update the information of this document and sharpen de policy conclusions.

Due to the global pandemic generated by COVID-19 the government of Honduras declared a “state of emergency” in February (“Estado de Emergencia en el Territorio Nacional a través del Decreto Ejecu-tivo Número PCM- 005-2020, 10 de febrero 2020). The country suffered the first confirmed COVID-19 case on March 12th, 2020. The first death was registered on March 26, 2020. This document updates a previous report (Díaz Bonilla, Laborde, and Piñeiro, 2021) on the impact of the COVID-19 pandemic on food systems in Honduras. First, it brings up to date the evolution of the pandemic, using different indicators. Second, it summarizes the main policy responses, costs, and fi-nancing. Third, it updates the evolution of key variables up to the time of this writing (June 2021). Fourth, there is a more detailed analysis of the evolution of some food value chains that are central for food consumption in Honduras. Fifth, main results for 2021 and 2022 of previous modeling work are briefly presented. A final section discusses policy considerations in light of the updated analysis.

This paper examines the continuing effects of COVID-19 and exposure to weather extremes on income, dietary, and migration outcomes in rural Guatemala. We rely on a comprehensive longitudinal survey of 1,612 smallholder farmers collected over three survey rounds in 2019, 2020, and 2021. We find improvements in incomes, food security, and dietary diversity in 2021 relative to 2020, but with levels still below pre-pandemic ones in 2019. We also find a substantial increase in the intention to emigrate that was not observed in the onset of the pandemic. In terms of the channels mediating the variations in dietary diversity and migration intentions, income shocks seem to have played a role, in contrast to direct exposure to the virus, local mobility restrictions, and food market disruptions. Importantly, households exposed to ETA and IOTA tropical storms, in addition to COVID-19, were considerably more prone to exhibit larger increases in the prevalence of moderate or severe food insecure episodes and larger decreases in their diet quality. The study provides novel evidence on vulnerable households’ wellbeing in the aftermath of a global crisis, including the effects of compound shocks.

As COVID-19 spread across the globe in early 2020, governments had to make difficult policy choices to balance the socioeconomic costs of social distancing and lockdown measures, on the one hand, and the human costs of increased morbidity and mortality of an unchecked pandemic, on the other. The challenge was particularly daunting for developing countries with their often illequipped and underfunded health systems coupled with general skepticism about the effectiveness of economic restrictions to curb viral spread, especially in densely populated informal urban communities (The Economist 2020). Poorer developing country populations also tend to be less resilient to income shocks, while the social protection measures needed to mitigate against income losses are costly. With developing country governments already heavily indebted before the pandemic (Onyekwena and Ekeruche 2019), and with further anticipated losses in tax revenues due to COVID-related economic restrictions, their ability to finance palliative measures without sacrificing much-needed, longer-term public investments has remained a major concern.

The remarkable resilience of the economy during the pandemic, driven by policy support, favorable credit conditions and a favorable external environment, has almost returned the level of GDP to its pre-pandemic projected trend. Reflecting the prevalence of domestic factors, headline inflation eased to 3 percent (the lower limit of the inflation target band) at end-2021. For 2022, growth is expected to moderate while inflation is expected to rise in line with global inflationary pressures. Despite the resilience, social indicators such as poverty and malnutrition remain high. The outlook is very uncertain with significant downside risks, mostly external, including from the pandemic, geopolitical tensions, and the tightening of global financial conditions in response to global inflationary pressures.

Produced since 2012, the IMF’s annual External Sector Report analyzes global external developments and provides multilaterally consistent assessments of external positions, including current accounts, real exchange rates, external balance sheets, capital flows, and international reserves, of the world’s largest economies, representing over 90 percent of global GDP. Chapter 1 discusses the evolution of global external positions in 2020, external developments throughout the COVID-19 crisis, and policy priorities for reducing excess imbalances over the medium term. Chapter 2 analyzes how the unprecedented fiscal support provided in response to the COVID-19 crisis has affected external positions at the individual and global level. It also focuses on how withdrawal of such support will impact external positions in the medium term. Chapter 3, “Individual Economy Assessments,” provides details on the different aspects of the overall external assessment and associated policy recommendations for 30 economies. This year’s report and associated external assessments are based on the latest vintage of the External Balance Assessment (EBA) methodology and on data and IMF staff projections as of June 30, 2021.

This paper focuses on Guatemala’s Request for Purchase Under the Rapid Financing Instrument. The coronavirus disease 2019 pandemic is severely impacting Guatemala. Faltering external demand, declining remittances, and the necessary lockdown and social distancing to contain the virus, have disrupted economic activity and severely worsened external and fiscal positions. IMF support under the Rapid Financing Instrument will help address the urgent balance of payments and fiscal needs, improve confidence, and catalyze support from other external partners. In order to support the recovery and counter future shocks, the authorities intend to maintain an accommodative monetary policy stance and exchange rate flexibility. While credit risk regulations have temporarily been eased to facilitate loan restructuring, the authorities are closely monitoring banks’ exposures and the levels of provisioning to ensure the stability of the financial system. The Guatemalan authorities have reaffirmed their commitment to ensure that emergency financing is used effectively, transparently, and through reinforced governance mechanisms.