Nicaragua Economic Forecast

Nicaragua Economic Outlook

April 12, 2022

Q4’s growth remained solid and broadly stable from Q3, in light of a boom in government spending, healthy growth in household spending, and the strong performance of the mining and construction sectors. In contrast, investment momentum slowed sharply. Available data from 2022 points to moderating growth: The expansion in economic activity in January dropped below Q4’s average, as transport and fishing output declined. Inflation also rose, which could have dampened private spending in January–March. Still, households probably got a boost from surging remittances in January–February. Looking to Q2, a recently announced temporary fuel price freeze could offer some relief going forward, but will likely be insufficient to offset higher international commodity prices.

Nicaragua Economic Growth

In 2022, growth should simmer down due to a fading base effect and small contractions in public spending and private investment. Still, potential investment from the Belt and Road Initiative and deeper trade ties with China may boost activity. Political tensions, repercussions from Russian sanctions and international backlash over 2021’s elections cloud the outlook. FocusEconomics panelists see GDP expanding 2.6% in 2022, which is down 0.3 percentage points from last month’s forecast, and 2.4% in 2023.

Nicaragua Economy Data

2015 2016 2017 2018 2019
Population (million)6.36.36.46.56.5
GDP per capita (USD)2,0442,1022,1582,0281,915
GDP (USD bn)12.813.313.813.112.5
Economic Growth (GDP, annual variation in %)4.84.64.6-4.0-3.9
Consumption (annual variation in %)5.46.02.6-3.9-2.2
Investment (annual variation in %)27.7-0.31.2-26.4-30.6
Unemployment Rate-  -  -  -  -  
Fiscal Balance (% of GDP)-1.6-2.0-2.0-4.0-  
Money (annual variation in %)19.110.513.0-19.73.2
Inflation Rate (CPI, annual variation in %, eop)3.13.15.73.96.1
Inflation Rate (CPI, annual variation in %)4.03.53.94.95.4
Benchmark Interest Rate (%)12.0311.4410.8510.9012.46
Exchange Rate (vs USD)27.9029.3030.8032.3333.84
Exchange Rate (vs USD, aop)26.5928.2629.7631.5833.00
Current Account (% of GDP)-8.8-6.5-4.90.6-  
Current Account Balance (USD bn)-1.1-0.9-0.70.1-  
Trade Balance (USD billion)-3.5-3.7-3.5-2.7-  
Exports (USD billion)2.42.22.52.5-  
Imports (USD billion)5.95.96.15.2-  
Exports (annual variation in %)-9.3-8.114.5-1.2-  
Imports (annual variation in %)0.5-0.33.5-14.7-  
International Reserves (USD)2.52.42.82.32.4
External Debt (% of GDP)82.182.683.188.7-  

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Nicaragua Facts

Value Change Date
Exchange Rate33.472.11 %Jan 01

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