Political Stalemate A Key Risk To Growth Outlook

BMI View: More than one month on from Nicaragua's controversial municipal elections, the country remains in a state of political paralysis. The refusal of both the ruling FSLN and the opposition PLC to attend congress has led to policy deadlock, which could threaten to shelve vital initiatives required to keep the economy afloat in 2009. Together with the freezing of international aid and drying up of investment, we are bracing ourselves for a painful correction in real GDP growth to just 0.8% in 2009 from an estimated 2.8% in 2008.

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