IMF Executive Board Concludes 2025 Article IV Consultation with Nicaragua

• The Executive Board of the International Monetary Fund (IMF) concluded the 2025 Article IV consultation with Nicaragua on January 20, 2026.
• The Nicaraguan economy weathered well multiple shocks since 2018, and strong fundamentals should help Nicaragua withstand headwinds from ongoing shifts in the global policy landscape.
• Real GDP grew by 3.9 percent over 2022-25H1 and is expected to moderate to 3.4 percent in 2026. In the short term, the outlook remains broadly favorable, and there are upside risks to growth. However, downside risks and high uncertainty dominate over the medium term.
• Continued prudent fiscal, monetary, and financial policies will help maintain macroeconomic and financial stability, preserve fiscal sustainability, and strengthen policy buffers. For higher medium-term growth and further progress on poverty reduction, it is crucial to increase public investment, human capital accumulation, and targeted social spending, and diversify exports, while strengthening economic governance and anti-corruption frameworks, and the business climate, and significantly improving the rule of law.

Washington, DC: On January 20, 2026, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV Consultation[1] with Nicaragua and considered and endorsed the staff appraisal without a meeting. The authorities have consented to the publication of the Staff Report prepared for this consultation.

The Nicaraguan economy weathered well multiple shocks since 2018, supported by appropriate macroeconomic and financial policies, substantial pre-2018 crisis buffers, and financing from international financial institutions during the pandemic. Real GDP growth was further sustained recently by favorable terms of trade and high remittances growth. The economy is operating under targeted international sanctions, a geopolitical reorientation of official foreign inflows, and transfers of private property to the state since 2022. Strong fundamentals—low inflation, a declining public debt-to-GDP ratio, twin fiscal and external surpluses, well-capitalized banks and sizeable buffers—should help Nicaragua withstand headwinds from ongoing shifts in the global policy landscape.

The short-term economic outlook remains broadly favorable, with real GDP growth expected to reach 3.8 percent in 2025 and moderate to 3.4 percent in 2026. The medium-term outlook remains subject to high uncertainty, including due to global shifts in trade and immigration policies. Risks are tilted to the downside in the medium term, including from natural disasters, commodity price volatility, weaker global growth, tighter U.S. immigration and trade policies, and stricter and wider international sanctions. Upside short-term risks include more favorable terms of trade and higher public capital spending.  

READ MORE: https://www.imf.org/en/news/articles/2026/01/23/pr-26015-nicaragua-imf-executive-board-concludes-2025-article-iv-consultation