Nicaragua in 2018 – Bank of Nicaragua Projections
The Central Bank of Nicaragua (BCN by its acronym in Spanish) has presented an estimate of the main macroeconomic picture of the country for 2018. The details are contained in a report called “Macroeconomic Projections 2017-2018” (presented on December 29th 2017). The summary uses the information available at the date of preparation and relies on estimates of economic growth, inflation, balance of payments, and monetary and financial indicators of Nicaragua. Those estimates also consider data from international financial organizations in relation to how international influences will affect the national macroeconomic performance. The report is intended to be used as a tool in the decision-making process of economic agents and as a source of knowledge for those looking to find out about the Nicaraguan economy.
Growth: In general terms, in 2018, Nicaragua should maintain a growth rate of between 4.5 and 5.0 %. This will be mainly driven by the contributions of manufacturing, commerce, agriculture, livestock and construction activities.
Inflation: Is expected to be between 5.5 and 6.5% and includes increases in the prices of raw materials as well as being based on normal climatic conditions for the production of food and therefore the estimates of food prices.
Dollar/Cordoba Exchange Rate: This will follow the usual “daily slip rate” (or crawling peg) which is set at 5% per year. This system assures a high level of currency stability and protects the country’s export competitiveness.
Exports: The BCN predicts that this sector will keep pace and cites a recovery in the global economy.
Other: The inclusion of remittances, tourism income, foreign direct investment and external cooperation will place the current account of the balance of payments at around 6.2 percent of GDP.
The BCN projections assume a prudent and balanced management of public finances and debt will be maintained. The bank itself will maintain the health of the financial system and preserve adequate levels of gross international reserves.
The BCN makes it clear that the macroeconomic projections in their full report could be affected by many factors, including; volatility in the prices of relevant raw materials, higher international interest rates, international events and policies and adverse climatic conditions.