Poverty has declined, foreign investment has quintupled in a decade, the economy has grown more than the average in Central America and Nicaraguan businessmen are applauding it.
Carlos Pellas, one of the most successful Central American businessmen with investments in sectors relating to financial insurance, agribusiness, information technology, energy, vehicle distribution, and production and beer and spirits, did not make a statement in a merely personal capacity but rather one relating to the economy of his country, Nicaragua, when he said that "people think that things are going well, there is a lot of investment, construction has grown, it is a dynamic sector, you can tell that from one look".
Fitch Ratings predicts headwinds and higher risks for banks in Central American countries in 2016, resulting in lower credit growth.
From a report by Fitch Ratings Central America:
Headwind: Central American Banking systems face greater risks in 2016. A slowdown in growth of gross domestic product (GDP) in the region and, consequently, lower credit growth is anticipated.
In the first nine months of the year, economic activity grew by 3.5% compared to the same period in 2014, but the sectors that explained their growth in the first semester, have slowed.
From the executive summary of the report by Funides :
According to the Monthly Economic Activity Index (IMAE) up to September 2015, the growth rate of economic activity began to slow in early 2015.
The institution confirmed a positive outlook for the medium term, projecting economic growth of 4% and inflation of 3.5% by the end of the year.
From a press release issued by the International Monetary Fund:
A mission from the International Monetary Fund (IMF) headed by Mr. Gerardo Peraza visited Managua from 20 to 29 October 2015 in the context of the Article IV consultation.
Fitch notes that the relatively favorable external environment will not be enough for Central American countries to improve their credit ratings, which could remain stable despite fiscal problems.
From the press release by Fitch Ratings:
Fitch Ratings-New York-22 October 2015: External tailwinds are unlikely to lead to a significant uplift in Central America's creditworthiness, says Fitch Ratings in a new special report.
A 4% drop in corn production is projected for the crop yield for 15/16 compared to 14/15.
From the monthly report by the International Grains Council:
Revisions for wheat, barley and sorghum lift the forecast for world total grains (wheat and coarse grains) production in 2015/16 by 9m t m/m (month-on-month), to 1,996m, 1% short of last season’s record.
In the first half the year slaughter went up by 6% compared to the same period in 2014, and the industry expects to end 2015 with an annual increase of 8%.
In the case of egg production the increase during the first half of the year compared to the same period of 2014 was 11%, according to figures from the Central Bank of Nicaragua. Data from the entity indicates that between January and June 2015 production amounted to 24.8 million dozen.
In June 2015, economic activity grew by 3.6%, and the proportion of entrepreneurs who believe that the situation has worsened increased to its highest value since April 2013.
From the executive summary of the Economic Situation Report prepared by Funides :
The average annual growth of the Monthly Economic Activity Index (IMAE) shows that economic activity has slowed since December 2014.
"The ongoing economic recovery in the United States and persistence of relatively low oil prices will provide favorable tailwinds to the region.Because of supply constraints, the region is expected to maintain a moderate pace of growth in coming years."
From the press release by IMF:
Central bank governors, finance ministers, and banking superintendents of Central America, Panama, and the Dominican Republic, and senior IMF officials met in El Salvador on July 23-24 to review the economic outlook for the region and strategies to strengthen policy frameworks and raise inclusive growth. The regional conference saw the participation of the President of El Salvador, Salvador Sánchez-Cerén; Governor of the Bank of México, Agustín Carstens; Director of the Netherlands Bureau of Economic Policy Analysis, Laura van Geest; and former Finance Minister of Perú, Luis Carranza.
No changes in the economic or political direction are foreseen in a country where President Ortega maintains high public approval rates in a context of economic growth, although there is erosion of democratic institutions.
On Tuesday June 9 a panel discussion was held in the premises of the Inter American Dialogue in Washington DC, whose main topic was the analysis of the economic and political situation in Nicaragua.
Reports indicate that for the first time in months, commodities such as cotton, corn and wheat are showing an upward trend, while others such as coffee, sugar and copper have still not recovered.
The downward trend shown by the international price of coffee and other commodities such as sugar, gold and copper, could continue a while longer on the same trajectory, since there are not any factors that would justify a change in the trend, reports Blackbox at, CABI. However, "... They have been on the floor for the last seven years, having reached the bottom during the 2009 crisis, therefore no further declines are expected in general terms, while at the same time there are commodities that have started going into a bull market. "
When you look at Nicaragua without prejudice and without political bias, you can see a country which unlike before, offers good opportunities for investment.
EDITORIAL
Central America Viewed from Within
When you look at Nicaragua without prejudice and without political bias, you can see a country that offers good opportunities for investment.
And who better to do that exercise than a businessman linked to actual production.
The GDP growth projection of 4.5% for 2015 reflects the positive effect of increased investment and the reduction in oil prices.
From a statement issued by the Nicaraguan Foundation for Economic and Social Development (Funides):
The Nicaraguan Foundation for Economic and Social Development (FUNIDES) projects in its first Economic Situation report of the year that in 2015 the economy will grow by 4.5%.
"Nicaragua has advanced greatly in recent years consolidating its economic stability, improving macroeconomic balances and reducing vulnerabilities."
From a statement issued by the International Monetary Fund (IMF):
Mr. Min Zhu, Deputy Managing Director of the International Monetary Fund (IMF), issued the following statement at the conclusion of his visit to Nicaragua today:
Slow growth is projected in El Salvador, very good performance in Nicaragua, stability in Panama, more competition in Guatemala and moderate growth in Costa Rica.
From a report by Fitch Ratings entitled "2015 Perspectives: Central American Banks":
Costa Rica:
Fitch Ratings has revised the outlook for the sector from positive to stable, because the agency does not anticipate substantial improvements in respect to the previous year.