Tuesday 26 October 2021

Political crisis and pandemic lead Nicaragua to three straight years of recession

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TODAY NICARAGUA – The pandemic arrived in Nicaragua when the country already had two consecutive years of recession due to the demonstrations that were unleashed in 2018 by the reforms that the Government introduced to the social security system.

This year Nicaragua would be the country with the lowest growth in the region and the November elections add more uncertainty

These mobilizations severely impacted the country’s economy, until producing an economic contraction of 3.4% in production in 2018, contrary to the average growth that the country had experienced during the period 2011-2017, calculated at 5, two%.

The situation did not improve much in 2019, when Nicaragua again registered a 3.7% contraction, as described by the Central American Institute for Fiscal Studies (Icefi) in the document: Macro-fiscal Profiles of Central America 14: Nicaragua (in Spanish).

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For 2020, the authorities estimate a drop in production of 2%, but the Economic Commission for Latin America and the Caribbean (ECLAC) estimated it at 4% in the document: Preliminary balance of the economies of Central America and the Dominican Republic in 2020 and prospects for 2021 (in Spanish).

Guatemalan economist, Jonathan Menkos, executive director of the Central American Institute for Fiscal Studies, and the Nicaraguan, Juan Sebastián Chamorro, agreed that there are doubts about the quality of statistical information in Nicaragua, as well as its availability.

“Nicaragua must be analyzed by noting that they are shades of gray, because we do not have complete information, nor is it a country that generates and publishes surveys of living conditions, or that allows knowing beyond the macro data if, in reality, the conditions of well-being and economics are improving or not,” Menkos said.

“We have been denouncing this issue of the official figures with great concern for several years now because the public institutions have stopped publishing economic statistics for some time, in fact in 2019 and in 2020 some follow-up surveys and almost all the economic information is now published late,” added Chamorro.

The monthly index of economic activity published by the Central Bank of Nicaragua indicates that in 2020 there was a slowdown, but not a fall; however, the gross domestic product does show a drop, which is an inconsistency.

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What is clear, said Chamorro, is that the country has had three consecutive years of setbacks and for this 2021 the prospects are not the best either.

All international organizations estimate very small growth, of 1% or less.

Chamorro explained that this year is electoral (the presidential elections will be held in November 2021), and that generates more political uncertainty.

The situation has been reflected in an increase in poverty that affects almost half of the population.

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“In social matters, a report presented by ECLAC estimates that monetary poverty in Nicaragua increased 5.6 percentage points in 2020, from 47.1% of the total population in 2019, to 52.7% of the total population. the population in 2020, that is, around 3.5 million Nicaraguans do not have the resources to meet their needs,” says the Macro-fiscal Profiles document.

Article originally appeared on Today Nicaragua and is republished here with permission.

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Q24N
Q24N is an aggregator of news for Latin America. Reports from Mexico to the tip of Chile and Caribbean are sourced for our readers to find all their Latin America news in one place.

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