The Economic Commission for Latin America and the Caribbean (ECLAC) increased the number of estimated growth for Nicaragua at the end of 2022, but estimated an economic slowdown for 2023 in the Central American countries.
ECLAC estimates that Nicaragua will close 2022 with an estimated growth of the Gross Domestic Product (GDP) of 3.5, a higher projection than the same period in the previous year when there was only a 3% growth. By 2023, the entity considers that the economy could slow down and reach 2.1 economic growth.
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These data counteract the projections estimated by the Central Bank of Nicaragua (BCN) that reflected in its numbers a growth of 4 and 5 percent for the end of this year. “Taking into account the mixed external environment for our economy and the positive evolution of domestic economic activity in the first months of 2022, the Central Bank estimates that the Nicaraguan economy will grow in 2022 in a range of between 4% and 5%” , noted the bank in its report.
According to ECLAC, the slowdown in 2023 will happen because the countries of the region “will once again be faced with an unfavorable international context, in which a slowdown in both growth and global trade, higher interest rates and less global liquidity are expected. ».
Regarding the fiscal area, “public debt levels will remain high in a large number of countries. In a context of high demands for public spending, measures will be required to strengthen fiscal sustainability and expand fiscal space by strengthening public revenues.
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In addition to this, the low dynamism of Central America’s main trading partner and main source of remittances, the United States, “would affect both the external sector and private consumption. In this case, however, the lower prices of basic goods would work in their favour, since several of them are net importers of food and energy. Finally, in the Caribbean economies, inflation has impacted not only real income and with it consumption, but also production costs with a negative impact on the competitiveness of exports of both goods and tourism”, indicates the agency.
All of Central America will suffer these ravages, as confirmed by ECLAC, one of the most affected countries in the region will be El Salvador with a growth of 1.9 in 2023 compared to this year, which is estimated to close at 2.5, being one one of the lowest, as well as Mexico, which ended the year with a GDP growth of 1.9.
Nicaragua’s economy grew by 10.3% in 2021, the first year of growth after three years in a row of closing with a red balance, according to the Central Bank. The Nicaraguan economy had contracted by an average of -3.03% per year in the 2018-2020 period.
