## IMF Executive Board Concludes 2025 Article IV Consultation with Nicaragua

_IMF News, January 26, 2026_

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## Bibliographic details
- Published: January 26, 2026

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### Overview
- Executive Board concluded the 2025 Article IV consultation with Nicaragua on January 20, 2026, and considered and endorsed the staff appraisal without a meeting.
- The authorities consented to the publication of the Staff Report prepared for this consultation.
- Press Release No. 26/015; publication date on the landing page: January 26, 2026.

### Recent economic performance
- Real GDP grew by 3.9 percent over 2022-25H1.
- Real GDP growth was 3.6 percent in 2024 and 3.8 percent in 2025 (staff projection).
- Drivers: favorable terms of trade, high remittances growth, sound macroeconomic and financial policies, substantial pre-2018 crisis buffers, and financing from international financial institutions during the pandemic.
- Current macro-financial strengths: low inflation, declining public debt-to-GDP ratio, twin fiscal and external surpluses, well-capitalized banks, sizeable buffers, sustainable NIIP, adequate reserve coverage, and an external position assessed as substantially stronger than the level implied by fundamentals and desirable policies.

### Outlook and risks
- Short-term outlook: broadly favorable; growth expected to reach 3.8 percent in 2025 and moderate to 3.4 percent in 2026.
- Medium-term outlook: high uncertainty; staff expect real GDP growth to stabilize at around 3½ percent.
- Upside short-term risks: more favorable terms of trade and higher public capital spending.
- Downside medium-term risks: natural disasters; commodity price volatility; weaker global growth; tighter U.S. immigration and trade policies; stricter and wider international sanctions; geopolitical reorientation of official foreign inflows; transfers of private property to the state since 2022.
- Foreign reserves: expected to remain ample, albeit growing at a slower pace as current account surpluses narrow.

### Executive Board assessment (key findings)
- Nicaragua’s economy remains resilient, supported by sound macroeconomic policies amid a shifting global policy landscape.
- Inflation remains low.
- Financial sector reportedly well capitalized with adequate liquidity and low NPLs.
- Fiscal position is strong; external and overall public debt at moderate risk of debt distress with substantial space to absorb shocks and strong debt carrying capacity.
- Current account and public sector positions: CA surpluses and public debt trends noted as supportive of resilience.

### Policy recommendations (staff advice)
- Fiscal policy:
  - Continue safeguarding fiscal sustainability and building buffers while supporting growth.
  - Broad support for the 2026 capital and human development spending plans; proceed cautiously with budget execution in line with staff’s baseline scenario given downside risks, high uncertainty, limited external financing, and persistent imbalances in the pension system.
  - Enhance tax collection and better target SOE transfers to create space for higher priority public investment and targeted social spending.
  - In a downside scenario, deploy targeted and time-bound support to vulnerable groups.
- Monetary policy and financial markets:
  - Monetary policy should continue preserving price and external stability; BCN should continue strengthening monetary policy transmission.
  - Ongoing easing of monetary policy stance and the announced rate of crawl of 0 percent for 2026 are appropriate.
  - Foster use of local currency and deepen capital markets to enhance monetary policy effectiveness.
  - In a downside scenario, be ready to increase the monetary reference rate and recalibrate the rate of crawl, if needed.
  - Support implementation of comprehensive financial laws approved in early 2025; strengthen crisis preparedness, prepare the analysis needed for activating the CCB and contingency plans, and stand ready to release CCBs in a downside scenario.
  - Adjust financial regulations in consultation with banks to avoid excessive regulatory burden.
- Structural and social policies:
  - Boost human and physical capital and diversify exports.
  - Strengthen social safety nets and expand active labor-market policies to increase labor’s contribution to medium-term growth.
  - Support expected public investment in transport and health.
  - Work with export firms to scale up into higher value-added products by supporting needed skills.
- Governance, rule of law, and transparency:
  - Strengthen the business climate and economic governance, especially significantly improving the rule of law.
  - Strengthen business facilitation to reduce the cost of doing business and maintain fiscal integrity.
  - Increase transparency, accountability, and effectiveness of administrative and judicial processes related to private property rights (including of third parties), including guaranteeing all adequate, effective, and fair legal recourse.
  - Increase fiscal transparency by publishing consolidated financial statements and audit reports.
  - Coordinate with private sector and NPOs to better understand AML/CFT risks and increase reporting of suspicious transactions as needed.
  - Strengthen the anti-corruption framework by allowing automatic publication of asset declarations of top-level officials and ensuring effective management and oversight of all property of the state.

### Data and statistical recommendations
- Data provided to the Fund remains broadly adequate for surveillance with some shortcomings.
- Staff recommend expanding data sources, improving timeliness of key statistics such as poverty rates, and enhancing publication of detailed balance of payments data, including remittances.

### Selected social and economic indicators (as presented)
- I. Social and Demographic Indicators
  - GDP per capita (current US$, 2024): 2,865
  - GNI per capita (Atlas method, current US$, 2023): 2,360
  - Population (millions, 2024): 6.9
  - Unemployment (percent of labor force, 2024): 3.4
  - GINI Index (2014): 46.2
  - Income share held by the richest 10 percent (2014): 37.2
  - Poverty rate ($3.65/day line in 2017 PPP, percent): 12.5
  - Adult literacy rate (percent, 2015): 82.6
  - Life expectancy at birth in years (2022): 74.5
  - Infant mortality rate (per 1,000 live births, 2022): 10.7
- II. Economic Indicators (selected entries)
  - GDP growth: 2024: 3.6; 2025: 3.8; 2026 (projection): 3.4
  - GDP (nominal, US$ million): 2024: 19,694; 2025: 21,407; 2026: 22,737
  - Consumer price inflation (period average): 2024: 4.6; 2025: 2.5; 2026: 2.7
  - Gross domestic investment (percent of GDP): 2024: 24.7; 2025: 27.3; 2026: 28.0
    - Private sector: 2024: 16.1; 2025: 18.2; 2026: 18.3
    - Public sector: 2024: 8.6; 2025: 9.0; 2026: 9.7
  - Gross national savings (percent of GDP): 2024: 28.9; 2025: 36.6; 2026: 33.2
  - Consolidated public sector (overall balance after grants) (percent of GDP): 2024: 2.9; 2025: 2.4; 2026: 1.6
  - Revenue (including grants) (percent of GDP): 2024: 33.3; 2025: 33.1; 2026: 33.5
  - Expenditure (percent of GDP): 2024: 30.4; 2025: 30.8; 2026: 31.9
  - Central Government overall balance (percent of GDP): 2024: 2.3; 2025: 2.2; 2026: 1.5
  - Money and financial (annual percentage change): Broad money: 2024: 12.0; 2025: 22.3; 2026: 7.6
  - Credit to the private sector (annual percentage change): 2024: 20.7; 2025: 12.5; 2026: 12.4
  - Non-performing loans to total loans (ratio): 2024: 1.4; 2025: 1.3
  - Regulatory capital to risk-weighted assets (ratio): 2024: 18.4; 2025: 18.5
  - Current account (percent of GDP): 2024: 4.2; 2025: 9.3; 2026: 5.2
  - Remittances (percent of GDP): 2024: 26.6; 2025: 29.5; 2026: 26.1
  - Gross international reserves (US$ million)3/: 2024: 5,820; 2025: 8,018; 2026: 9,050
  - Net international reserves (US$ million)4/: 2024: 5,115; 2025: 7,258; 2026: 8,157
  - Non-financial public sector debt (percent of GDP)5/: 2024: 45.1; 2025: 43.2; 2026: 42.4
    - Domestic public debt: 2024: 8.3; 2025: 7.8; 2026: (noted) 7.8 for 2025
    - External public debt: 2024: 36.0; 2025: 34.9; 2026: 34.5
    - Private sector external debt: 2024: 27.9; 2025: 25.5; 2026: 23.8

*Press Release No. 26/015 — International Monetary Fund, January 26, 2026.*

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## References

- [Cambodia and the IMF](http://www.imf.org/external/country/KHM/index.htm)
- [Nicaragua and the IMF](http://www.imf.org/external/country/NIC/index.htm)
- [Republic of Slovenia and the IMF](http://www.imf.org/external/country/SVN/index.htm)
- [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
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_Source: https://www.imf.org/en/news/articles/2026/01/23/pr-26015-nicaragua-imf-executive-board-concludes-2025-article-iv-consultation_