Economy / Nicaragua
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Macroeconomic Forecast Nicaragua
July 2008 | Macroeconomic ForecastsSorry, you must be a subscriber to view this article in full. If you are a subscriber please login.
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BMI View: At the risk of repeating ourselves, inflation remains the number one concern in Nicaragua, and latest data show that price growth is really starting to accelerate. Headline inflation jumped to a 21.7% y-o-y, putting the country amongst the worst performing across the EM spectrum. The central bank has admitted defeat in meeting its single-digit inflation target this year, and we warn that even our consensus-beating 17.5% end-2008 target may prove too modest. Beyond this year, inflation should start to ease (to a projected 11.5% by end-2009), but we warn that the country's consumer price index is likely to remain susceptible to global commodity shocks over the medium term.