The complex economic and political situation that has affected Nicaragua since April continues to affect Central America, where exporters report losses of $45 million.
In the past months, cargo transport faced difficulties in moving goods along Nicaragua's highways due to demonstrators' blockades and insecurity, seriously affecting Central American companies.
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.
Businessmen in Nicaragua expect to reduce by at least 50% the investments they had previously planned for 2018, waiting for the problems affecting the country to be solved.
The research by the Consejo Superior de la Empresa Privada (Cosep) and the Fundación Nicaragüense para el Desarrollo Económico y Social (Funides), takes place in the context of more than 160 days of political and social crisis, which has severely affected the performance of the country's economy.
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.
Following the reductions in the index of economic activity that were reported in May and June, in July the indicator continued to fall, reporting a 4% drop compared to the same month in 2017.
The IMAE registered a decrease of 4.2% compared to July 2017, with an average annual growth of 0.7 percent and an accumulated variation of -1.7 percent.The underlying variation, measured with the trend cycle series, registered a year-on-year decrease of 4.6 percent.The seasonally adjusted IMAE series grew by 7.7% compared to June 2018, the Central Bank of Nicaragua reported.
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 updatedits 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.
After reaching the highest level this year with 5.6% in June, the price index reported a variation of 5.2% in August compared to the same month in 2017.
The Consumer Price Index (CPI) showed a decrease of 0.24% (-0.03% in August 2017), explained mainly by the behavior of prices in some goods and services in the divisions of Food and non-alcoholic beverages (- 0.75%), Recreation and culture (-3.88%) and Communications (-0.06%), which together contributed -0.4 percentage points to the observed variation, reported the Central Bank of Nicaragua (BCN).
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%.
Due to the crisis that has been unfolding in the country since April, the ECLAC has reduced its growth projection for the Nicaraguan economy from 5% to 0.5% this year.
Laprensa.com.ni reports that "...Before the crisis, the ECLAC placed Nicaragua among the fiveLatin Americaneconomieswith the highest growth for this year, with an expansion of GDP of 5% after having grown 4.9% in 2017."
At the end of the first semester, the commercial deficit of goods amounted to $1.282 billion, 3% more than in the same semester of 2017, and exports were reduced by almost 4% in the same period.
From a statement issued by the Central Bank of Nicaragua:
From June of this year, the index of economic activity fell by 12% with respect to the same month in 2017, explained mainly by the performance of the sectors of agriculture, health and education.
The political and social crisis that began in mid-April continues to take its toll on the Nicaraguan economy. In line with the loss of more than 86,000 jobs registered in the last four months, at the end of June economic activity fell by 12% in year-on-year terms.See "Employment: Easier to destroy than create"
In line with the year-on-year falls of 2%, 4% and 7% reported in March, April and May, in June 810,430 workers were registered as enrolled in the social security scheme, 12% less than was reported in the same month in 2017.
In relation to the performance of the sectors, the Central Bank of Nicaragua (BCN) reported that in year-on-year terms, most of the activities registered decreases, except for the manufacturing industry activities, and electricity, gas and water, which recorded increases of 1.4% and 0.2%, respectively.
During the seventh month of the year, the CPI recorded a monthly variation of -0.08%, mainly explained by the prices of Food and non-alcoholic beverages.
From a report by the Central Bank of Nicaragua:
The Consumer Price Index (CPI) showed a decrease of 0.08 percent (0.39% in July 2017), mainly explained by the behavior of prices in some goods and services in the divisions of Food and non-alcoholic beverages (-1.04% ); and Communications (-0.02%); which together contributed 0.364 percentage points to the observed variation.In contrast, the Transportation division showed an increase of 1.45 percent (0.112pp).
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.
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.
In the first six months of the year, the country received $725 million in remittances from abroad, which is a 9% increase compared to the same period in 2017.
The Central Bank of Nicaragua reported that remittances totaled 115.2 million dollars in June (US $111.1 million in June 2017), which meant an increase of 3.7 percent.
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