Up to October 2018, the economic activity index fell 6% with respect to the same month in 2017, mainly because of the performance in the commerce, hotels and restaurants sectors.
The Central Bank of Nicaragua reported that "... In October, the monthly economic activity index (IMAE) decreased 6.0 percent compared to October 2017. The average annual variation was -1.0 percent and the cumulative variation in the January-October period was -2.3 percent.
In December, the CPI registered a monthly variation of 0.6%, because of the rise in Food and non-alcoholic beverages, Recreation and Culture and Health prices.
The report of the Central Bank of Nicaragua states that "...
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."
Higher domestic demand and increased investment are the factors that will influence the 3.3% growth forecast for the regional economy next year.
According to forecasts by the Economic Commission for Latin America and the Caribbean (ECLAC), in 2019 Panama will be the economy with the highest growth in Central America, with an expected rate of 5.6%.
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.
During the eleventh month of the year, the CPI registered a 0.52% monthly variation, mainly because of the prices of Food and non-alcoholic beverages, and Communications.
The Central Bank of Nicaragua reported that in accumulated terms, national inflation reached 3.24% (4.51% in November 2017), caused by the behavior of goods and services prices in the sectors of Transportation; Housing, water, electricity, gas and other fuels; and Education with a joint contribution of 1.642 percentage points. In year-on-year terms, inflation was at 4.40%, 0.95 percentage points lower than that registered in November 2017, and subjacent inflation was 4.14% (4.07% in November 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.
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.
Arguing that the country's fiscal and financial profiles have weakened, Standard & Poor´s downgraded from B to B- the negative outlook for Nicaragua's foreign currency debt.
The negative outlook reflects a greater than one of every three probabilities of a downgrade in the next 12 months because of possible additional pressure on the balance of payments or the domestic financial system in dollar terms, given the government's limited foreign exchange financing options.
During the tenth month of the year, the CPI registered a monthly variation of 0.51%, mainly because of the prices of Food and non-alcoholic beverages.
According to the report of the Central Bank of Nicaragua, the Consumer Price Index (CPI) showed an increase of 0.51 percent (0.55% in October 2017), mainly caused by the behavior of prices in some goods and services of the Food and non-alcoholic beverages divisions (0.67%); Transportation (1.56%) and Housing, water, electricity, gas and other fuels (0.82%); which together contributed 0.429 percentage points to the variation observed. On the other hand, the Leisure and culture division showed a decrease of 0.29 percent (-0.011pp).
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.
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