Macroeconomic Forecast Nicaragua

July 2008 | Macroeconomic Forecasts

Rising wage costs, high commodity prices, administrative costs ahead of regional elections and increased subsidies in 2008 have exacerbated Nicaragua's fiscal weaknesses. Fiscal spending grew by 33% y-o-y during January to May 2008, outpacing revenues, which increased by 23%. These figures chime with our fiscal account projections, which anticipate a worsening of the nominal deficit to 2.6% of GDP in 2008 from 2.2% last year. Looking further ahead, we expect the fiscal shortfall to narrow to 2.1% of GDP in 2009.

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