Transport Costs Put Pressure on Inflation

In June, the consumer price indexes in all of the countries in the Central American region recorded year-on-year increases in the transport spending division.

Monday, July 30, 2018

According to a report from the Central American Monetary Council, in June of this year, Nicaragua was the country that reported the highest year-on-year increase in the price level of transportation services, registering an increase of 9.8% compared to the same month in 2018.

After Nicaragua, Costa Rica reported the highest level of inflation in the expense division in question, registering 5.6%, followed by Honduras with 5.5%, Panama with 5.4%, El Salvador with 5.3% and Guatemala with 5.2%.

These increases have arisen in the context of the Nicaraguan social and political crisis, which is hindering transit through the country's roads, due to the multiple blockades that have been set up by citizens who are opposed to the government of Daniel Ortega. 

See full report (In Spanish).

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More on this topic

Figures from the Crisis

December 2018

After the political and social crisis that began in April, the Nicaraguan economy will lose more than $1.3 billion this year, and GDP could decline by 4%, together with the collateral effects suffered by the countries of the region.

Several indicators have reflected the weak performance of the country's economy since the crisis began.

Not a Good Year for transport business

November 2018

Because of the social and political crisis, businessmen working in the freight transport sector in Nicaragua estimate that by the end of this year their operations will have been down by up to 25%.

According to the Transporters Association of Nicaragua (ATN), the crisis that began in April this year has caused losses in cargo transport activity in the country, and the operations of companies in the sector are estimated to register a 25% reduction in 2018 compared to 2017.

Imports Feel Effects of the Crisis

July 2018

Purchases abroad by Nicaraguan companies during May were 5% lower than those reported in the same month last year.

Three months after the social and political crisis broke out, various economic sectors now feeling the impact. From January to April of this year, imports were growing at a monthly average of 10%, however, with the advance of the crisis that trend has been reversed, registering a 5% year-on-year fall in purchases made abroad, falling in May from $529 million to $502 million.

Fitch Downgrades Nicaragua to 'B'

June 2018

The downgrade and Outlook change reflect increasing political instability and the corresponding deterioration of Nicaragua's investment, economic growth, and public finance outlook

From a statement issued by Fitch Ratings:

Fitch Ratings-New York-22 June 2018: Fitch Ratings has downgraded Nicaragua's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'B' from 'B+'. The Outlook is Negative. 

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