Because of the political crisis that began in Nicaragua in April, during the third quarter of last year the country's GDP fell by 4.5% compared to the same period in 2017.
The Central Bank of Nicaragua reported that in the third quarter of 2018, the economy registered a 4.8 percent year-on-year decline and a 0.5 percent annual average reduction.
"The tightening of global financing conditions is a concern for Central American countries with large current account deficits or those highly dependent on capital flows."
According to the report "World Economic Outlook - January 2019" compiled by the World Bank (WB), countries with a high external debt burden would be at risk if a sudden change in investor confidence in emerging market and developing economies were to occur.
In the first eleven months of last year, the country received remittances from abroad for $1.352 million, recording an increase of almost 8% over the same period in 2017.
A report from the Central Bank of Nicaragua details that "... Remittances totaled 125.4 million dollars in November 2018 (US$116.0 million in November 2017), an 8.1% year-on-year variation."
From January to October of this year, 13 out of 17 domestic consumption activities reported contractions over the same period in 2017.
The third report of the Economic Activities Monitoring of Nicaragua of the Superior Council of Private Enterprise (Cosep) and the Nicaraguan Foundation for Economic and Social Development (Funides), detail that the sales of urbanization companies that build homes of medium-high and high level from January to October of this year are 80% lower than those recorded in the first 10 months of 2017.
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. One of them is the IMAE, as the Central Bank of Nicaragua reported that following the trend that has been observed since May, in September the index reported a 4.3% decrease compared to the same month in 2017.
In the first ten months of the year, the country received $1.226 million in remittances from abroad, an increase of almost 8% compared to the same period in 2017.
The Central Bank of Nicaragua (BCN) reported that remittances totaled US$128.9 million in October (US$118.5 million in October 2017), an 8.8 percent year-on-year variation.
In the January-October 2018 period, remittances received by the Nicaraguan economy totaled US$ 1,226.3 million, a 7.7% increase over the same period in 2017.
Following the trend observed since May, in September the monthly index of economic activity in Nicaragua reported a 4.3% drop compared to the same month in 2017.
The Central Bank of Nicaragua reported that the Monthly Index of Economic Activity (IMAE) registered a 4.3 percent decrease compared to September 2017, with an annual variation of -0.2 percent and a 1.9 percent decrease in the accumulated variation.
Justifying a larger-than-expected economic contraction, a growing fiscal deficit and a greater risk of internal and external financial constraints, the rating agency lowered the rating from B to B-.
This is Fitch Ratings' second downgrade so far this year. In the first quarter, the rating was B+ with a solid outlook, in the second quarter the rating agency downgraded it to B with a negative outlook, and now it downgraded it to B-, and kept the negative outlook.
The decline in economic activity is the reason for the year-on-year decline of 36% reported in the capital goods imports up to August this year.
According to figures from the Central Bank of Nicaragua (BCN), between August 2017 and the same month of this year, imports of capital goods registered a fall of 35.8%, declining from $107 million to $69 million.
The region is expected to conclude 2018 with a rise of just over 4% in the volume exported and just 3.6% in value, due to the fall in international prices of several agricultural products.
According to the International Trade Outlook for Latin America and the Caribbean 2018, published by the Economic Commission for Latin America and the Caribbean (ECLAC), it is expected that this year Central America will export larger volumes at lower prices.
During the first nine months of the year, the country received remittances from abroad for $1.097 million, recording an increase of 7.6% over the same period in 2017.
The Central Bank of Nicaragua (BCN) reported that remittances totaled 121.7 million dollars in September (US$112.8 million in September 2017), which resulted in a year-on-year variation of almost 8%.
Because of the political crisis that Nicaragua has experienced since April, during the second quarter of the year the country's GDP decreased by 4.4% compared to the same period in 2017.
The Central Bank of Nicaragua reported that in the second quarter of 2018, the Nicaraguan economy recorded a year-on-year decline of 4.4 percent and an average annual growth of 1.6 percent in the original data, according to the preliminary estimate of quarterly GDP. With this result, economic activity fell 0.9 percent in the first half.
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.
In the first eight months of the year, the country received $976 million in the form of remittances sent from abroad, registering an increase of 7.6% compared to the same period in 2017.
The Central Bank of Nicaragua reported that remittances totaled $126.7 million in August (US $120.4 million in August 2017), which represents an interannual variation of 5.2 percent.
In the first seven months of the year, the country received $849 million in the form of remittances sent from abroad, registering an increase of 8% compared to the same period in 2017.
The Central Bank of Nicaragua reported that remittances totaled 124.4 million dollars in July (US $122.4 million in July 2017), which meant a year-on-year variation of 1.6%.