Nicaragua: Economy Could Fall by up to 11%

If the country does not provide an early solution to the socio-political crisis it has been going through since April 2018, it is projected that the economy could decline between 7% and 11% during 2019.

Tuesday, February 5, 2019

The Nicaraguan Foundation for Economic and Social Development (Funides), presented the "Informe de Coyuntura" (Situation Report), which explains that if the socio-political crisis continues this year there will be a greater fall in the economy compared to the 4% reported in 2018.

See "Crisis Keeps Shocking Real Estate Sector"

The document explains that "... if the crisis continues throughout 2019, sanctions from the United States will play a key role in the dynamics of economic activity."

Elnuevodiario.com.ni review that "... According to Funides, this year's U.S. sanctions would have an indirect effect on economic growth through increased uncertainty for economic agents. This effect would be much more important and of greater impact than the gradual reduction of international cooperation."

The article adds that "... The "crisis of confidence of economic agents" is affecting investment flows, tourism, external demand for some traditional export products and free zones, and the outflow of deposits from the national financial system, among others."

Also see "Crisis Keeps Shocking Real Estate Sector" and "Nicaragua: Economic Activity Still Weakening".

The most recent figures from the Central Bank of Nicaragua detail that up to November 2018 the index of economic activity fell 5% with respect to the same month in 2017, mainly because of the performance in the sectors Hotels and Restaurants, and Transport and Communications.

See Funides projections.

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More on this topic

Economy: Predictions Reserved for the Region

July 2019

The outlook for some economies in the region for 2019 is not the best: in Nicaragua GDP is expected to fall between 5% and 7%, while in Costa Rica the growth estimate at the end of the year was reduced from 3.2% to 2.2%.

The estimates of the Nicaraguan Foundation for Economic and Social Development (Funides), presented in its "Informe de Coyuntura - Julio 2019", indicate that by 2019 an economic contraction of between 5.4% and 6.8% will be reported in the country.

Costa Rica: Production Keeps Falling

July 2019

In the first quarter of the year, the country's Gross Domestic Product increased 1.8% year-on-year, lower than the 3.3% reported in the same period in 2018, which is partly explained by the fall in the prices of some agricultural export products.

According to the report of the Central Bank of Costa Rica, the slowdown combined external and internal factors, among which stand out:

Economic recession caused by the crisis

October 2018

New World Bank projections estimate that because of Nicaragua's political crisis, the country's GDP will fall 4% this year and 1% in 2019.

According to the expectations of the international organization, Nicaragua will be the only economy that will decrease in Central America, because of the political and social crisis in which the country is involved since last April, it is expected that the Gross Domestic Product (GDP) will decrease 3.8% in 2018 compared to 2017.

The Real Impact of the Crisis

September 2018

Five months after the socio-political crisis in Nicaragua, it is estimated that this year Gross Domestic Product will contract between by 2.1% and 4%, in real terms.

The Nicaraguan Foundation for Economic and Social Development (FUNIDES) has updated its estimates on the economic and social impact of the crisis in 2018, in which it poses a first scenario that assumes that people and companies will adapt to a "new reality". In this context, the losses in added value would amount to $946 million.

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