A small village in Nicaragua

Nicaragua Economic Forecast

Nicaragua Economic Outlook

GDP growth accelerated in year-on-year terms in Q2, thanks to upturns in private spending and fixed investment. In Q3, the economy seemingly strengthened further. Economic activity growth accelerated in July–August relative to Q2 on the back of a broad-based improvement: Output in the agriculture, mining, construction, manufacturing and communication sectors expanded at faster clips. Meanwhile, external sector data sent mixed signals. Merchandise exports rebounded in July–August relative to Q2’s average. However, remittances growth softened in the same two-month period. In other news, in October, the government presented the 2024 budget to Parliament. The budget envisages a fiscal surplus of 0.9% and focuses on poverty alleviation and public investment.

Nicaragua Inflation

Inflation declined to 7.2% in September from 7.5% in August. The deceleration was driven by softer price pressures for food and textile products. Inflation will average lower in 2024 relative to this year, thanks to a base effect and softer demand. However, it will remain elevated due to the government’s fuel policy and inefficient local distribution networks.

This chart displays Economic Growth (GDP, annual variation in %) for Nicaragua from 2013 to 2022.

Nicaragua Economic Data

2018 2019 2020 2021 2022
Population (million) 6.5 6.6 6.5 6.5 6.6
GDP (USD bn) 13.0 12.7 12.7 14.2 15.7
GDP per capita (USD) 2,002 1,932 1,950 2,168 2,373
GDP (NIO bn) 411 421 435 498 562
Economic Growth (Nominal GDP, ann. var. %) -0.8 2.3 3.5 14.3 13.0
Economic Growth (GDP, ann. var. %) -3.4 -2.9 -1.8 10.3 3.8
Private Consumption (ann. var. %) -4.6 -1.8 -0.4 8.7 5.9
Government Consumption (ann. var. %) -2.3 1.4 2.4 9.3 -6.0
Fixed Investment (ann. var. %) -22.0 -27.5 11.1 34.3 -4.2
Exports (G&S, ann. var. %) -1.6 6.1 -9.0 18.1 8.6
Imports (G&S, ann. var. %) -15.1 -3.8 0.1 21.1 5.0
Unemployment (% of active population, aop) 5.4 5.6 5.0 4.5 3.5
Fiscal Balance (% of GDP) -4.0 -1.7 -2.6 -1.5 0.6
Public Debt (% of GDP) 54.4 57.6 65.4 65.9 61.0
Money (ann. var. of M2 %) -19.7 3.2 16.1 11.9 6.6
Inflation (CPI, ann. var. %, eop) 3.9 6.1 2.9 7.2 11.6
Inflation (CPI, ann. var. %, aop) 4.9 5.4 3.7 4.9 10.5
Average Lending Rate (%, aop) 10.90 12.46 11.18 9.62 9.23
Exchange Rate (NIO per USD, eop) 32.49 33.70 34.92 35.41 36.50
Exchange Rate (NIO per USD, aop) 31.65 33.22 34.38 35.10 35.86
Current Account Balance (USD bn) -0.2 0.8 0.5 -0.4 -0.2
Current Account Balance (% of GDP) -1.8 6.0 3.6 -3.1 -1.4
Merchandise Trade Balance (USD bn) -1.6 -1.1 -0.9 -1.9 -2.8
Merchandise Exports (USD bn) 4.2 4.3 4.4 5.6 6.3
Merchandise Imports (USD bn) 5.8 5.4 5.3 7.5 9.1
Merchandise Exports (ann. var. %) 0.4 3.4 1.3 26.8 13.2
Merchandise Imports (ann. var. %) -11.4 -7.0 -1.1 40.0 21.8
Foreign Direct Investment (USD bn) 0.8 0.5 0.7 1.2 1.3
International Reserves (USD bn) 2.3 2.4 3.2 4.0 4.4
International Reserves (months of imports) 4.7 5.3 7.2 6.5 5.8
External Debt (USD bn) 13.0 13.2 13.6 14.4 -
External Debt (% of GDP) 100.1 104.2 107.3 101.3 -

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