In Nicaragua, the authorities have not published information on the Monthly Index of Economic Activity since February 2019, when the year-on-year fall was 7.5%, a situation that prevents businessmen from making decisions based on the real situation of the economy.
In the country, the business sector expects an increase in operating costs in the coming months, as a result of the expected increase in the price of electricity in the short term.
With the aim of signing agreements on economic and trade issues, Nicaraguan authorities visited Iran, but for Nicaraguan businessmen there is no possibility of "developing markets with that country.”
Ortega's regime seeks to strengthen its relations with Iran, since it recently sent to the National Assembly for approval, the "Agreement for the Reciprocal Promotion and Protection of Investments between Nicaragua and the Islamic Republic of Iran."
In Nicaragua, there is uncertainty because the government is reviewing the tax reform without the participation of businessmen, and because adjustments to the minimum wage could be made in September.
Weeks ago, it was reported that when the government's review of the tax reform in force in the country since February is completed, businessmen consider that no tax cuts will be made, despite the fact that production costs in the country have risen considerably.
In the government's review of Nicaragua's tax reform that has been in place since February, businessmen consider that no tax cuts will be made, even though production costs in the country have risen considerably.
After the approval on February 27, 2019 of the amendment to the Tax Concertation Law, which consists of raising from 1% to 2% the income tax for medium sized companies with higher income, and for large taxpayers from 1% to 3%, the productive sector has reported increases in its production costs.
Businessmen in the industrial sector in Nicaragua say that since the tax reform was implemented in the first quarter of the year, employment has fallen between 30% and 35%.
On February 27, 2019 was approved the amendment to the Law of Tax Concertation, which consists of raising from 1% to 2% income tax for medium enterprises with higher income. Another of the measures contemplated by the reform is to raise the income tax of large taxpayers from 1% to 3%.
Businessmen in Nicaragua estimate that this year the sales of houses will not exceed one thousand units throughout the country, which is explained by the economic situation that the country has been living for fourteen months now.
Although in April 2018 the political and social crisis broke out in the country, builders managed to sell 3,108 homes last year, but the figure was 34% lower than the 4,738 homes sold in 2017.
In Nicaragua, the business sector is preparing an appeal of unconstitutionality against the Tax Concertation Law, approved a few days ago by the National Assembly.
In the midst of Nicaragua's political and economic crisis, the National Assembly approved a tax reform that increases the income tax of large taxpayers from 1% to 3%.
On the morning of February 27th, the reform of the Tax Concentration Law was approved, which also contemplates raising from 1% to 2% the income tax for medium sized companies with higher incomes.
In Nicaragua, the government plans to increase employer, labor, and state Social Security contributions, and to approve a tax reform that would increase taxes for medium and large companies.
Although the country has been in a serious economic and political crisis since April 2018, when the government tried to implement reforms to the Nicaraguan Institute of Social Security (INSS), the Ortega administration is once again trying to make changes to the institution, this time through an administrative resolution.
A 40% decline is estimated in the construction of social housing investments in the country, and in the case of middle and upper-class housing, the contraction reaches 70%.
According to figures from the Superior Council of Private Enterprise (Cosep), the value added in the construction sector will register a 25% decline, falling from $399 million in 2017 to $300 million in 2018.
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.
Businessmen in Nicaragua reported that from January to September sales of furniture and wood showed a decrease of 60% compared to the same period in 2017.
According to the second Monitoring of Economic Activities in Nicaragua, of the Superior Council of Private Enterprise (Cosep) and the Nicaraguan Foundation for Economic and Social Development (Funides), under the political and social crisis that has affected the country for more than six months, sales of the furniture sector have reported negative results.
In September, sales of houses in Nicaragua reported a fall of 80%, and sales of vehicles and hotels were reduced 75% and 70%, respectively, compared to the same month last year.
According to the Second Monitoring of Economic Activities in Nicaragua, prepared by the Superior Council of Private Enterprise (Cosep) and the Nicaraguan Foundation for Economic and Social Development (Funides), during September sales of advertising agencies fell 48%, those of distributors of medical equipment 40% and those of restaurants 35%, compared to the ninth month of 2017.
Preserving macroeconomic and financial stability and restoring private sector confidence are part of the IMF's recommendations to the Nicaraguan government to mitigate the impact of the political and economic crisis.
A team from the International Monetary Fund (IMF) visited Nicaragua, and after evaluating the situation of the economy after more than six months of social and political crisis, forecasts a 4% contraction of the Gross Domestic Product by 2018.
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