Nicaragua Economic Forecast

Nicaragua Economic Outlook

February 13, 2018

The economy lost puff in the third quarter according to recent data, following a strong start to 2017. Growth was 3.2% year-on-year, dampened by a fall in exports of key agricultural products and transport services. On the other hand, public and private consumption were fairly robust. Signs for Q4 are positive; in November, year-on-year economic activity growth picked up, while remittances surged from a year ago, likely thanks to a dynamic U.S. labor market. At the end of January, the government announced measures to rationalize electricity subsidies and reduce VAT exemptions. However, in a recent staff visit the IMF urged Nicaragua to go further in strengthening the fiscal position, in particular by putting the Social Security Institute on a sustainable long-term financial footing.

Nicaragua Economic Growth

Growth should be brisk this year, thanks to strong public infrastructure investment and private consumption growth. Risks are mainly tilted to the downside due to financial problems at the Social Security Institute, lower financing from Venezuela and the possible passage of the NICA Act in the U.S. Analysts expect GDP to grow 4.5% in 2018, unchanged from last month’s forecast, and 4.4% in 2019.

Nicaragua Economy Data

20122013201420152016
Population (million)6.16.16.26.16.2
GDP per capita (USD)1,7131,7771,9042,0962,150
GDP (USD bn)10.410.911.812.713.2
Economic Growth (GDP, annual variation in %)5.64.54.64.94.7
Consumption (annual variation in %)4.04.24.55.35.4
Investment (annual variation in %)-0.10.3-0.822.34.9
Unemployment Rate5.95.76.86.0-  
Fiscal Balance (% of GDP)-0.1-0.7-1.2-1.6-2.0
Money (annual variation in %)17.619.613.019.110.5
Inflation Rate (CPI, annual variation in %, eop)6.65.76.53.13.1
Inflation Rate (CPI, annual variation in %)7.27.16.04.03.5
Benchmark Interest Rate (%)12.0014.9812.2311.5711.15
Exchange Rate (vs USD)23.8525.1126.1027.9029.30
Exchange Rate (vs USD, aop)23.5324.4725.7226.5928.26
Current Account (% of GDP)-10.6-11.0-7.6-9.0-8.6
Current Account Balance (USD bn)-1.1-1.2-0.9-1.1-1.1
Trade Balance (USD billion)-3.2-3.3-3.3-3.5-3.7
Exports (USD billion)2.72.42.62.42.2
Imports (USD billion)5.95.75.95.95.9
Exports (annual variation in %)17.4-11.18.3-9.3-8.1
Imports (annual variation in %)13.5-3.43.50.5-0.3
International Reserves (USD)1.92.02.32.52.4
External Debt (% of GDP)86.189.786.682.582.9

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Nicaragua Facts

ValueChangeDate
Exchange Rate31.002.11 %Feb 20

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