Nicaragua Economic Outlook
February 12, 2019
The Nicaraguan economic crisis remains severe. Despite intensifying international pressure for the government to hold early elections, the Ortega administration instead unveiled a major tax overhaul in late January. The package includes higher income taxes and social security contributions aimed at reviving the government’s depleted coffers. Given pension reforms sparked the socioeconomic crisis that began last April, this latest proposal could stir a resurgence in public unrest and would likely erode firms’ competitiveness, which could, in turn, further exacerbate the hardship faced by Nicaraguans. Meanwhile on 25 January, Moody’s downgraded its outlook on Nicaragua’s B2 credit rating to negative from stable, in response to the country’s shaky balance sheets, debt burden and tight liquidity.Nicaragua Economic Growth
As the political crisis drags on, the economy will likely be pushed further into recession. Capital flight, diminishing FDI and falling fixed investment are expected to cause GDP to shrink again in 2019. FocusEconomics panelists expect GDP to contract 1.8% in 2019, which is down 1.4 percentage points from last month’s estimate, and to grow 1.2% in 2020.Nicaragua Economy Data
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Nicaragua Facts
| Value | Change | Date | |
|---|---|---|---|
| Exchange Rate | 32.53 | 2.11 % | Feb 14 |
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