Nicaragua: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Nicaragua
IMF Staff Country Reports, January 27, 2023
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- Canonical URL
- Nicaragua: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Nicaragua
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Bibliographic details
- Published: January 27, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400230783.002
Key findings
- Prudent macroeconomic policies, substantial pre-crisis buffers and official external financial assistance helped Nicaragua’s economy rebound from a protracted contraction during 2018–2020, caused by the socio-political crisis of 2018, two major hurricanes in 2020, and the pandemic.
- Inflation reached 11.4 percent in November 2022, primarily due to import price increases.
- In the medium term, real GDP is expected to grow by about 3 1/2 percent, below the pre-crisis historical average, as credit to the private sector and private investment cautiously recover.
Projections and outlook
- Real gross domestic product (GDP) growth is expected to moderate to 3 percent in 2023, due mainly to the global slowdown.
- Inflation is projected to decline in 2023 in line with lower growth and an expected significant decline in global inflation.
Risks and downside scenarios
- The favorable outlook is subject to uncertainty and risks on the downside, primarily due to:
- external developments,
- natural disasters,
- deterioration in the business climate, and
- stricter international sanctions.
Policy implications and considerations
- Continuation of prudent macroeconomic policies and maintenance of pre-crisis buffers contributed to the rebound and remain important to sustain recovery.
- Official external financial assistance played a supportive role in the rebound and is a factor to consider in policy planning as the economy transitions to moderate growth and recovery of private credit and investment.
International Monetary Fund. Nicaragua: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Nicaragua.
Content in this bundle
- 1nicea2023001