The Central Bank has cut its growth forecast for GDP for the year to 4% - 4.5% and expects inflation to be between 6.55% and 7.5%, higher than initially expected.
From the executive summary of the report "State of the Economy and Prospects, First Semester 2014":
At the end of the first half of the year, the Nicaraguan economy is maintaining positive growth rate, mainly driven by external demand and improved terms of trade.
A slowdown in the pace of economic activity in the country and loss of dynamism in private investment has been indicated.
Economic Situation of the second quarter of the year, prepared by the Nicaraguan Foundation for Economic Development:
The Nicaraguan Foundation for Economic and Social Development (FUNIDES) presents its second report on economic conditions in 2014, which states that in the first 4 months of this year, the economy experienced a mild slowdown. According to the 12-month average variation of the Monthly Index of Economic Activity (IMEA), growth which had been over 5 percent since April 2013, fell to 4.8 percent in April, largely due to the earthquakes in that month.
In order to reduce the effects of the economic slow down, some politicians are turning to monetary policy or the Central Bank. They believe that by printing more money there will be more wealth, more investment and more employment.
When a Central Bank, such as the US Federal Reserve (FED) or the European Central Bank, increases the amount of money in circulation it is done by reducing interest rates.