Nicaragua Economic Forecast

Nicaragua Economic Outlook

June 14, 2022

The economy in Q1 failed to live up to Q4 2021’s double-digit growth, in part due to a base effect. An improvement in fixed capital growth wasn’t enough to outweigh the drags from slower expansion of exports and private and public consumption. In Q2, higher global fertilizer and fuel prices amid the war in Ukraine are likely depressing agricultural output. Rising import costs and inflation should also be denting private consumption despite strong remittances growth. Nevertheless, the government extended April’s price freeze on fuels and gas, with the measure to continue till late August, boosting household and public spending. In other news, on 7 June, President Ortega authorized the deployment of Russian military forces on home soil later in 2022, increasing the probability of new international sanctions.

Nicaragua Economic Growth

Growth this year should drop to a third of what it was in 2021, amid investment outflows and subdued consumer spending. U.S. sanctions will also hamper trade. The central bank’s tightening cycle, which took off in April to halt capital flight, may further stifle activity. Meanwhile, soaring import prices, political turmoil and further international sanctions pose risks to the outlook. FocusEconomics panelists see GDP expanding 3.0% in 2022, which is up 0.1 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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