People in Central America and southern Mexico are preparing for one of the most powerful Atlantic hurricanes ever recorded, as it approaches their region.

Forecasters say the storm, code-named Mitch, is rated as a potentially catastrophic Grade-Five -- that's stronger than Hurricane Georges, which killed more than five-hundred people in the same area last month.

It's not yet known when or where the storm will hit land, but with wind-speeds of more than two-hundred and fifty kilometres an hour, it is already causing heavy rains, floods and high waves.

Several countries have taken precautionary measures such as evacuating low-lying areas, suspending air and sea traffic and closing government offices, schools and businesses.

Forecasters say Mitch could weaken over the next few days, but will continue to pose a considerable threat.