Macroeconomic Forecast Nicaragua

Nicaraguan inflation has fallen off a cliff in recent months. Headline consumer price growth tanked to just 2.0% y-o-y in June, down from 12.5% in January and 24.0% at the peak back in August 2008. Disinflationary trends have been even more profound in the capital city, Managua, where consumer prices grew by just 1.1% y-o-y in June, down from 23.9% in August 2008. While the pace of deceleration has taken even us by surprise, we still believe that inflation could finish the year at 4.0%, as base effects kick in.

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