LatinNews Daily - 30 January 2023

*The International Monetary Fund (IMF) has released a new report which forecasts that Nicaragua’s GDP grew 4% in 2022, supported by “external demand, remittances, and high prices for commodity exports”. The 2022 figure is down from 10.3% in 2021, which had followed a protracted contraction during 2018-2020, caused by the socio-political crisis of 2018, two major hurricanes in 2020, and the coronavirus (Covid-19) pandemic, according to the report which was released following the conclusion of an Article IV consultation. The IMF states that Nicaragua’s gross international reserves have doubled since end-2018, to over US$4bn which it notes is about six months of imports, excluding maquila. It expects GDP growth to moderate to 3% in 2023, due mainly to the global slowdown. The IMF also highlights that Nicaragua’s inflation - which reached 11.4% in November 2022, primarily due to import price increases - is projected to decline in 2023 in line with lower growth and an expected significant decline in global inflation. In the medium-term the IMF expects Nicaragua’s GDP to grow by around 3.5% which it notes is “below the pre-crisis historical average as credit to the private sector and private investment cautiously recover”.

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