Nicaragua Economic Forecast

Nicaragua Economic Outlook

January 15, 2019

The economy again contracted sharply in the Q3 as political developments continued to choke the tourism and financial sectors. Fixed investment fell at a dizzying pace in the quarter and household consumption also declined notably. Data for Q4 paints an equally grim picture, with the formal labor market shrinking further in October. While remittance inflows were robust in October and November, they were likely not enough to keep the economy afloat. Turning to the political arena, the government’s further crackdown on the press and its recent ban of several NGOs that have been critical of Ortega’s government were additional blows in the assault on civil liberties. Meanwhile, the U.S. NICA Act implemented in December will restrict financial aid to Nicaragua, further weighing on the government’s already precarious finances.

Nicaragua Economic Growth

The outlook for 2019 is bleak and could well worsen on continued political unrest. The economy should contract due to falling fixed investment, and ailing tourism, construction and financial sectors. FocusEconomics panelists expect GDP to contract 0.4% in 2019, down 0.2 percentage points from last month’s estimate, and to grow 2.5% in 2020.

Nicaragua Economy Data

20132014201520162017
Population (million)5.96.06.16.26.2
GDP per capita (USD)1,8471,9752,0732,1442,221
GDP (USD bn)11.011.912.613.213.8
Economic Growth (GDP, annual variation in %)4.94.84.84.74.9
Consumption (annual variation in %)3.84.25.25.33.8
Investment (annual variation in %)3.5-0.424.03.9-1.4
Unemployment Rate5.35.66.06.2-  
Fiscal Balance (% of GDP)-1.1-1.5-1.6-2.0-1.9
Money (annual variation in %)19.613.019.110.513.0
Inflation Rate (CPI, annual variation in %, eop)5.76.53.13.15.7
Inflation Rate (CPI, annual variation in %)7.16.04.03.53.9
Benchmark Interest Rate (%)14.9813.5412.0511.4410.78
Exchange Rate (vs USD)25.3026.6027.9029.3030.80
Exchange Rate (vs USD, aop)24.4725.7226.5928.2629.76
Current Account (% of GDP)-10.9-7.1-9.1-7.5-5.0
Current Account Balance (USD bn)-1.2-0.8-1.1-1.0-0.7
Trade Balance (USD billion)-3.3-3.2-3.5-3.7-3.6
Exports (USD billion)2.42.72.42.22.5
Imports (USD billion)5.75.95.95.96.1
Exports (annual variation in %)-11.111.3-9.3-8.114.4
Imports (annual variation in %)-3.43.10.5-0.33.5
International Reserves (USD)2.02.32.52.42.8
External Debt (% of GDP)88.485.483.683.4-  

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Nicaragua Facts

ValueChangeDate
Exchange Rate32.632.11 %Jan 30

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