Nicaragua: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Nicaragua

This 2022 Article IV Consultation highlights that 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. Real gross domestic product (GDP) growth is expected to moderate to 3 percent in 2023, due mainly to the global slowdown. Inflation—which reached 11.4 percent 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, 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. The favorable outlook is subject to uncertainty and risks on the downside, primarily due to external developments, natural disasters, or deterioration in the business climate and stricter international sanctions.