Nicaragua Economic Forecast

Nicaragua Economic Outlook

September 14, 2021

GDP rocketed at the fastest year-on-year pace since our records began in the second quarter, gaining considerable steam from the prior quarter’s result (Q2: +16.7% yoy; Q1: +3.8% yoy). Although Q2’s reading was flattered by a low base effect, it pointed to strong momentum nonetheless: Capital and private spending growth accelerated in annual terms compared to Q1, signaling robust domestic activity. That said, government consumption grew at a more modest pace. Meanwhile, exports rebounded markedly, likely as a result of increased activity in the tourism sector, while imports surged at a record pace. Turning to this quarter, remittance inflows remained robust in July, which should be supporting consumer spending. Lastly, tensions have continued to build up ahead of November’s general elections, with further arrests of prominent opposition figures made in recent weeks.

Nicaragua Economic Growth

GDP is seen bouncing back to growth this year, supported by a tighter labor market and ample stimulus in the U.S., which should bolster remittances and help household spending recover. Risks to the outlook remain, however, due to the slow domestic vaccine rollout and heightened political tensions. FocusEconomics panelists see GDP expanding 3.5% in 2021, which is up 0.9 percentage points from last month’s forecast, and 2.2% in 2022.

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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