Nicaragua Economic Forecast

Nicaragua Economic Outlook

July 14, 2020

The economy likely contracted in the second quarter as the pandemic took its toll, on the heels of moderate growth in the first quarter. In April, economic activity deteriorated markedly due to widespread contractions, with only subsectors such as construction registering a small increase in activity. Moreover, on the external front, exports underperformed amid lockdowns abroad. Financially, President Ortega’s regime has found little international support due to diplomatic isolation. This means the government could have to dip into Central Bank deposits to keep operating, and limits the potential for fiscal stimulus. In mid-June, Fitch revised the country’s credit rating outlook to negative amid increased financing risks and rising spending pressures.

Nicaragua Economic Growth

The economy is seen contracting this year as the Covid-19 pandemic triggers a global recession, hurting external demand, while the domestic outbreak hits activity at home. Serious downside risks stem from the lack of containment measures potentially leading to an aggravation of the Covid-19 outbreak; limited fiscal support; and political uncertainty. FocusEconomics panelists project GDP to contract 6.7% in 2020, which is up 0.1 percentage points from last month’s projection, before expanding 0.9% in 2021.

Nicaragua Economy Data

2015 2016 2017 2018 2019
Population (million)
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 %)
Consumption (annual variation in %)
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)
Inflation Rate (CPI, annual variation in %)
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)  
Imports (USD billion)  
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)
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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