Although Nicaragua maintained a good growth rate of 4.6 percent and 4.7 percent in 2016 and 2017, respectively, due to the social and political unrest that the country has experienced since April 2018, the economy suffered a contraction in 2018 of 3.8 percent. According to the latest forecasts, for 2019 growth is expected to fall to -5.0 percent, and would recover slowly to 0.6 percent by 2021.
The violence that has prevailed in the last year, job losses, and a fall in consumer and business confidence, plus a decline in sectors such as tourism and construction, have taken a social and economic toll, threatening recent efforts in poverty reduction.
According to the 2016 Standard of Living Survey by the National Development Information Institute, general poverty in Nicaragua dropped from 29.6 to 24.9 percent between 2014 and 2016; while in the same period extreme poverty fell from 8.3 to 6.9 percent. Despite this progress, poverty remains high.
World Bank Macro Poverty Outlook most recent data indicates that, based on projected growth of GDP per capita, poverty is estimated to increase by more than 3 percentage points between 2016 and 2019.
Nicaragua is still one of Latin America’s least developed countries, where access to basic services is a daily challenge.
The World Bank has supported poverty reduction measures in Nicaragua through the International Development Association (IDA), the World Bank’s fund for the poorest countries.
To better reach the country’s vulnerable families, IDA projects leverage local initiatives that stretch limited resources further and deliver sustainable results.
Last Updated: Oct 10, 2019