LatinNews Daily - 21 November 2022

In brief: IMF hails Nicaragua's economic recovery

*Following an official staff visit to Nicaragua, the International Monetary Fund (IMF) has issued a statement outlining that, after contracting by about 9% during 2018-2020, Nicaragua’s “economic activity is recovering well, supported by appropriate macroeconomic and financial policies and substantial pre-crisis buffers from government deposits and international reserves”. It adds that “international official financing, including IMF emergency assistance”, also helped the economy to cope with the coronavirus (Covid-19) pandemic and reconstruction efforts after the two consecutive hurricanes of November 2020. The IMF estimates that Nicaragua’s real GDP grew by 10.3% in 2021, and is expected to grow by 4% in 2022, sustained by private consumption and exports, given favourable export prices. It adds that strong remittances, large foreign direct investment (FDI) projects and the allocation by the IMF of special drawing rights (SDRs) in August 2021 allowed the continued accumulation of gross international reserves to about US$4.2bn by end-September 2022. The IMF states that Nicaragua’s economic outlook is “favourable” although GDP growth is expected to moderate to 3% in 2023, due to weaker external demand and tighter external financial conditions.

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