Macroeconomic Forecast Nicaragua

BMI View: Nicaragua's modest programme of fiscal consolidation remains in play, with revenue growth of 14.0% y-o-y again outstripping the 5.6% y-o-y increase in expenditures in June. While this is in line with our end-2010 forecast for growth rates of 10.0% and 5.0% y-o-y for revenues and expenditures respectively, we caution that that the resulting 0.5% of GDP non-financial public sector deficit masks the true state of Nicaragua's finances, as it is heavily boosted by financial assistance from international agencies.

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