Nicaragua Economic Forecast

Nicaragua Economic Outlook

August 6, 2019

The economy likely continued to contract sharply in the first half of the year as businesses—particularly in the construction, tourism and retail sectors—continue to suffer from the uncertain environment created by the political crisis. International reserves have dropped notably in annual terms in H1, reflecting the increased economic instability, while freefalling merchandise imports shows dampened domestic demand. On a brighter note, remittance inflows rose at a strong rate in Q2, while the current account balance swung from deficit to surplus in Q1, largely due to the narrower trade deficit. In politics, in late July the opposition party claimed the Ortega administration “killed” negotiations by not sending representatives to a meeting which was supposed to mark the restarting of talks. This underlines just how little progress has been made towards reaching a final resolution.

Nicaragua Economic Growth

Nicaragua is forecast to remain deep in recession in 2019. The protracted political conflict will continue to weigh heavily on economic activity and employment, while also stalling much-needed economic reforms, draining public coffers and stoking uncertainty. The unresolved crisis remains the principal risk to the outlook. FocusEconomics panelists expect GDP to contract 4.8% in 2019, which is up 0.3 percentage points from last month’s estimate, and to contract 0.9% in 2020.

Nicaragua Economy Data

Population (million)
GDP per capita (USD)1,8501,9792,1052,1632,219
GDP (USD bn)11.011.912.813.313.8
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)3.5-0.427.7-0.3-5.1
Unemployment Rate-  -  -  -  -  
Fiscal Balance (% of GDP)-1.1-1.5-1.6-2.0-2.0
Money (annual variation in %)19.613.019.110.513.0
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
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)-10.9-7.1-8.8-6.5-4.9
Current Account Balance (USD bn)-1.2-0.8-1.1-0.9-0.7
Trade Balance (USD billion)-3.3-3.2-3.5-3.7-3.6
Exports (USD billion)
Imports (USD billion)
Exports (annual variation in %)-8.89.6-9.3-8.114.5
Imports (annual variation in %)-
International Reserves (USD)
External Debt (% of GDP)87.884.781.982.683.0

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Nicaragua Facts

Exchange Rate33.052.11 %Jul 31

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