Nicaragua’s economy to grow 3 percent according to IMF

Oct. 22, 2010 - PRLog -- The International Monetary Fund (IMF) improved the growth forecast of the Nicaraguan economy, noting that this year the economy will grow by 3 percent instead of the 1.8 percent originally projected. Additionally, the multilateral entity stated that in 2011 the country’s economy will also grow by 3 percent instead of 2.5 percent.

According to the second Economic Situation Report 2010, presented by the Nicaraguan Foundation for Economic and Social Development (FUNIDES, for its acronym in Spanish), the recovery of Nicaragua’s economic activity began during the second semester of 2009 and intensified during the first semester of this year.

The study results indicate that economic growth has been driven by external demand. During the first half of 2010 exports grew by 27.6 percent and imports 13.2 percent. It is important to highlight that although export growth has been widespread, the sectors with the greatest increase are mining (93.2 percent), agriculture (35.1 percent) and manufacturing (31.2 percent).

The growth rate of the top five export products showed the following behavior from January to July of this year: sugar (218.5%), cattle (61.4%), gold (55.2%), coffee (42.5% ) and beef (24.9%).

On the supply side, the most dynamic sectors are industry, livestock, trade and mining. On the demand side, exports of goods and services have shown the biggest increase, with a 28 percent growth.

The One-Stop-Shop for Exports (CETREX, for its acronym in Spanish)  stated that the United States continues to be the main destination of exports from Nicaragua (30.3 percent), followed by Venezuela (10.6 percent) and El Salvador (10.5 percent), which altogether buy more than half of Nicaragua’s products (51.4 percent).

Moreover, wages in the formal sector reflected an increase of 2.1 percent, based on data from the Nicaraguan Social Security Institute (INSS), and the Consumption Tax showed an increase of 15.8 percent in the first half of 2010.