Nicaragua

In-depth country-focused analysis on Nicaragua's economic, political and operational risk environment, complemented by detailed sector insight

Nicaragua

Our comprehensive assessment of Nicaragua's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Nicaragua, as well as the latest industry developments that could impact Nicaragua's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Nicaragua before your competitors.

Country Risk

Nicaragua Country Risk

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Core Views

  • Belize will post slower growth rates over the next decade than over the previous 20 years, underpinned by our expectation that productivity gains will remain limited. Furthermore, the government will be unable to pursue much-needed reforms in infrastructure and education due to a lack of available funding, further dampening Belize's long-term growth prospects.

  • Belize's current account deficit will remain substantial over the 10-year forecast period due to declining oil production and weakening export growth.

  • Public debt sustainability will remain precarious over the next several years, as Belize's debt load continues to grow. A rising debt burden, combined with a history of defaults, will drive up financing costs and increase rollover risk in the country.

  • Belize will...

Nicaragua Country Risk

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External Tailwinds Supporting Regional Underperformers

Core View

Central American outperformers Costa Rica and Panama are facing a more challenging road ahead in the coming years. As real GDP growth slows in Panama on the back of the end of canal construction, establishing fiscal discipline will be crucial. Should the country fail to rein in spending in an environment of lower growth, this would likely cool investor enthusiasm toward the country. Similarly, Costa Rica is also facing a challenging fiscal outlook - a situation which is only exacerbated by the fragmented political environment.

In contrast, our short-term outlook for most of Central America's underperformers is brightening. Guatemala, Honduras and El Salvador will benefit from stronger US demand for their manufactured goods, rising remittance inflows and lower oil prices in the...

Nicaragua Industry Coverage (9)

Agribusiness

Nicaragua Agribusiness

BMI View:

BMI View: We believe that Central America's agribusiness industry will continue to grow - albeit inconsistently across sectors - through to the end of our forecast period in 2020. Along the way, the different sectors of the market will be forced to grapple with an array of headwinds that will directly impact output growth across some countries in the region. As a result of rising incomes and growing populations, as well as an improving real GDP outlook for the region, we expect consumption output to outstrip supply in the livestock sector. Future risks for the agribusiness market include disease (predominantly coffee rust disease, or roya) and the potential impact...

Autos

Nicaragua Autos

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BMI View: Passenger vehicle sales in Central America in 2016 will continue to be driven by rising private consumption rates due to remittance inflows and a low inflationary environment, but will be tempered by a poor business environment and weaker growth in the construction sector will lead to declining growth in the commercial vehicle segment.

Central America - Fleet Size
Historical Data & Forecasts, 2014-2020 (units)
e/f = BMI estimate/forecast. Source: National sources, BMI ...

Infrastructure

Nicaragua Infrastructure

BMI View:

BMI View: We forecast an average of 2.1% real growth for the six construction industries of Central America in 2016. The decline from our forecast for 2015 - 4.4% - is mainly due to a steep drop-off in Panama as it concludes expansion of the Panama Canal and a normalisation of a housing boom in Nicaragua. The region will still offer significant opportunities: the transport sector will see strong growth as development funds target regional...

Nicaragua Infrastructure

BMI View:

BMI View: Nicaragua's booming construction industry will slow in 2016, as its major driver- residential building - continues to cool. A slowdown in the general economy, high-base effects, and poor investor sentiment will see a normalisation of growth, which will trend lower over our 10-year forecast period to 2025.

Latest Updates

  • We expect the construction industry boom to cool significantly in 2016 as the residential building sector continues to slow and the headline figure is pulled down by strong base effects.

  • A poor operational environment and general economic slowdown will present headwinds to construction growth, which we forecast to expand by 7.4% in real terms in 2016, but then average 2.6% growth over our forecast period (2016-2025).

    ...

Insurance

Nicaragua Insurance

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BMI View: Central America's insurance markets differ significantly in many ways from one another, in terms of scale, development, competition and product composition. Growth rates vary, although most outperform more developed markets despite ongoing structural issues and currency weakness in much of the region. Consolidation would bolster development in many markets, as would innovation in low-cost products, including microinsurance which has a limited presence in Central America.

BMI expects Central American insurance markets to continue to grow rapidly in the coming years. Annual growth rates outside Nicaragua, the region's underperformer, will consistently hit high single-digit rates, with some sectors consistently posting growth rates in excess of 10%. We highlight Costa Rica and El Salvador as markets...

Nicaragua Insurance

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BMI View: Nicaragua's is the smallest of the insurance industries in the Central American region, with total gross premiums in 2016 set to reach just USD197mn, equating to insurance density of just USD32 per capita. Local currency growth has been high, but returns for international companies have been limited by cordoba weakness which is set to continue. Demand for health insurance will be a key driver in non-life business, particularly as low-cost options are developed for low-income individuals and households. A lack of competition will, however, curtail innovation and inflate prices across much of the market, both trends to the detriment of consumers.

...
Headline Insurance Forecasts (Nicaragua 2013-2020)
2013

Pharmaceuticals & Healthcare

Nicaragua Pharmaceuticals & Healthcare

BMI View:

BMI View: Legislative and regulatory improvements to the Central American healthcare system will further strengthen sector coordination, enhancing medical efficiencies and treatments over the long-term. The region's ageing population and dependence on pharmaceutical imports will increase foreign investment appeal as public health provision grows.

Headline Expenditure Projections

  • Pharmaceuticals: USD3.7bn in 2014 to USD3.9bn in 2015; +4.6%. Our forecast has been maintained since Q115.

  • Healthcare: USD16.5bn in 2014 to...

Nicaragua Pharmaceuticals & Healthcare

BMI View:

BMI View: Access to affordable medicine will continue to be challenging for the majority of Nicaraguans in the coming years. Limited healthcare funding, low per capita pharmaceutical expenditure, a small and unregulated drug market and the socio-cultural preference for traditional medicines will present limited opportunities for innovative drugmakers.

Headline Expenditure Projections

Pharmaceuticals: NIO10.93bn (USDb401mn) in 2015 to NIO11.42bn (USD399mn) in 2016; +4.3% in local currency terms, and -0.7% in US dollar terms.

Healthcare: NIO28.80bn (USDb1.06bn) in 2015 to NIO32.21bn (USD1.13n) in 2016; +11.8% in local currency terms, and +6.5% in US dollar terms.

...
Headline Pharmaceuticals & Healthcare Forecasts (Nicaragua 2014-2020)

Telecommunications

Nicaragua Telecommunications

BMI View:

BMI View: Number portability will encourage increased competition as four out of eight Central American countries have introduced it already. For further competition to be increased, the progress of this depends on national commitments of these countries. We anticipate slower growth in the mobile sector across the board with Nicaragua offering real potential. Nicaragua offers real growth potential whereas increasing government meddling, as in the case of Guatemala is a worrisome development. Data-driven 3G/4G services have true potential for growth as the large operators are investing heavily into new infrastructure and technologies for such technological uptakes.

Key Data

  • Number porting in Panama increased 37.4% in 2014, highlighting that the population is increasingly more willing to take advantage of better available deals as they...

Latest Nicaragua Articles

  • We have upgraded our oil price forecast this month with markets having pric...

  • Record profits achieved in 2015 were due, in no small part, to the performa...

  • We are bullish oil prices from a multi-month perspective and maintain our f...

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