Nicaragua Economic Forecast

Nicaragua Economic Outlook

October 11, 2021

Following Q2’s historic economic acceleration on the back of strong performances both domestically and externally, high-frequency data points towards continued albeit more moderate growth in the third quarter. Although economic activity growth eased in July, it remained solid. Moreover, both imports and exports rose at a strong pace in the same month, hinting at healthy demand dynamics at home and abroad, while remittance inflows remained robust through July and August, which should have buttressed private spending. Turning to Q4, a record number of Covid-19 cases and deaths in early October have overwhelmed the country’s health system and will likely impact activity. Lastly, tensions around 7 November’s general elections have flared, with further arrests of prominent opposition figures made in recent weeks and concerns raised from the international community over the legitimacy of the electoral process.

Nicaragua Economic Growth

The economy is seen bouncing back to growth this year, supported by a tighter labor market and ample stimulus in the U.S., which should bolster remittances and help household spending recover. Next year, GDP growth should moderate as the favorable base effect subsides. A slow domestic vaccine rollout and heightened political tensions dampen the outlook. FocusEconomics panelists see GDP expanding 4.2% in 2021 and 2.1% in 2022, which is down 0.1 percentage points from last month’s forecasts.

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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