Tourism and trade of the Central American country are the sectors most affected by the protests that began in April 2018
At the end of 2017, projections by the Central Bank of Nicaragua (BCN, by its acronym in Spanish) indicated growth between 4.5% and 5% in the country's economy by 2018, one of the highest in Central America and the Caribbean. However, with the protests that began three months ago against reforms to the Social Security system, different economic sectors have faced great losses, thus endangering the national economy.
Leer en español: Nicaragua: ¿Protestas contra el Estado afectan a la economía?
According to Oviedo Reyes, president of the BCN, to date the tourism sector has suffered a loss of $ 185 million dollars. Several states that have depended on tourism as an essential part of their economy have shown their anguish regarding the demonstrations. Among these, the colonial city of Granada, one of the most visited in the country, has suffered due to the cessation of activity in the region.
In 2017, more than 1.5 million people from different parts of the world entered the country for tourism purposes. However, according to the National Chamber of Tourism of Nicaragua (Canatur, by its acronym in Spanish), many tourists have canceled their trips in the face of the political crisis.
In addition, hotels have been operating at 20% of their capacity, so they had to make cuts in their staff, according to the newspaper La Prensa of Nicaragua. Oviedo Reyes also pointed out that the unemployment rate could increase from 3.7% to 4.2%, that is, more than 50,000 fewer jobs. This is equivalent to $ 260 million dollars less in income.
Another sector that has been affected is the one of the commerce, in which losses of approximately $ 70 million dollars are estimated in only the first two weeks of protests. This is because blockades placed by opponents in 70% of the roads in ten states, such as pressure on the government, have limited the production and mobilization of export goods, such as beef and basic grains.
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According to the newspaper El Nuevo Diario of Nicaragua, the decrease in these exports has already impacted 12.82 million dollars less.
Economist Luis Murillo said in an interview with the newspaper La Prensa that the daily Nicaraguan economy produced at least $ 33 million dollars a day. However, with the crisis almost half of this production is being lost. In fact, the losses of tourism, commerce and other services, already amount to $ 258.9 million dollars. This represents a deceleration of almost 2%, according to the president of the BCN, on May 21.
The economist also pointed out that, in these months of protests repressed by the State, inflation, indebtedness and reduction in foreign investment; as well as the loss of confidence and the security of living in the country, Nicaragua has lost its international projection and image.
The economy of Nicaragua, which was one of the most promising in the region, will no longer meet the projections made in the last quarter of 2017. This is because it is estimated that after the blows of the demonstrations, the economy will only grow between 3% and 3.5%.
LatinAmerican Post | Valentina Moya Barraza
Translated from "Nicaragua: ¿Protestas contra el Estado afectan a la economía?"