Nicaragua Economic Forecast

Nicaragua Economic Outlook

January 18, 2022

Economic growth slowed to 9.7% in Q3 (Q2: +17.0%), although it remained solid overall. The figure was largely driven by softer private spending growth, as well as a net subtraction from the external sector. Turning to Q4, economic activity grew at a softer pace in October compared to the Q3 average, while growth in both merchandise exports and imports moderated significantly in the same month. That said, remittance inflows picked up in October–November, likely bolstering private spending. In politics, President Daniel Ortega and members of his Sandinista party were sworn in on 9 January following last November’s highly contested elections. Consequently, the U.S. imposed fresh sanctions on Nicaraguan officials closely tied to the president. Lastly, in an effort to forge stronger ties with China, the government signed a cooperation agreement with Beijing on the Belt and Road initiative.

Nicaragua Economic Growth

In 2022, economic growth should temper as the favorable base effect subsides and the U.S. economic cycle matures, resulting in a slowdown across most sectors of the economy. A lagging domestic vaccine rollout, heightened political tensions and international backlash over this year’s election results dampen the outlook. FocusEconomics panelists see GDP expanding 2.7% in 2022, which is up 0.4 percentage points from last month’s forecast, and 2.3% 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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