Nearshore Americas

Nicaraguan Economy Is Growing Strong Despite Regional Slowdown

Foreign investment has continued to rise in Nicaragua even as the Latin American economy as a whole is slowing down amidst slowdown in China and decreasing demand for commodities. In the past nine years, foreign direct investment in Nicaragua increased five times, reaching $1.5 billion last year.
Thanks to low inflation and cheap oil, thousands of people across the country have wriggled out of poverty. Today, according to a National Institute of Development Information report, less than 30% of the population are classified as poor, a record low and down from 42.5% in 2009, writes El Financiero.
Carlos Pellas, one of the most successful Central American businessmen, who has expressed satisfaction at the economic development, told the paper that even the construction industry is booming in the country. The Pellas Group is one of the powerful business conglomerates in Nicaragua, and its business interests range from insurance and agribusiness to information technology and energy.
Between 2012 and 2015, Nicaragua’s gross domestic product (GDP) grew by an average of 4.7% per year, a figure well above the 3.7% average throughout Central America. During the period, formal sector workforce increased from 500,000 to 783,000, and tax revenues more than doubled from a mere $926 million to $1.9 billion.
Other economic indicators, such as loan portfolio, deposits, international reserves, exports and remittances, all moved upwards as well. One of the major drivers of economy, it seems, is tourism. According to Prensa Latina, as many as 1.4 million tourists visited Nicaragua last year, generating about $450 million in economic activity.
Nicaragua, according to its central bank, ended 2015 with an average 4.5% GDP growth. With inflation hovering between 2%–3%, the country is now showing all the hallmarks of a healthy economy.

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Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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