Three months after the protests began in Nicaragua, which have unleashed deadly violence, with more than 350 killed and thousands injured, the country’s economy suffers serious consequences due to the fall in investment, employment and production.
After a slowdown in the Monthly Index of Economic Activity in April, a change of -4.9% was reported in May compared to the same month last year. Average annual growth was 2.6% and the variation accumulated up to the month of May was 0.9%.
According to the report by the Central Bank of Nicaragua, trade activity registered a decrease of 10.3%, (0.3% in the accumulated January-May), with joint decreases in wholesale and retail trade.
On the other hand, construction activity registered a decrease of 14.5% (-10.1% in the accumulated January-May). Among the construction materials that showed decrease were: steel, ready-mixed concrete, cement, quarry stone, wood, asphalt, blocks, and paving stones, among other things.
“We need to avoid that this economic crisis deepens and leads to irreparable damage; the important thing is to make a call to good sense, we must think of a solution that allows us to reactivate the economy,” said economist Mario Arana.
Exports Stagnate
During the first five months of the year exports totaled US$1.219 billion, without registering significant variations compared to the same period last year.
At the end of the first five months of the year, the value of FOB exports totaled $1.219 million, an amount that only exceeded by US$289,000 the $1.2189 billion exported in the same period in 2017, informed the Central Bank of Nicaragua.
The document (in Spanish) explains that this behavior resulted from combined interannual variations, identifying the months of January and April as those with increases and the rest of the months with falls in the export value ranging from -0.8 to -8.3 percent.
More Hotels Close Due to Crisis
Due to the climate of insecurity prevailing in Nicaragua and cancelled reservations, two hotels in the city of León have announced the closure of their operations.
“As of July 15, it has been decided to completely close operations in the city of León, until there is a safer climate for tourism development,” Art Collections Hotels reported in a statement.
According to the document, the closures include:
- Hotel El Convento and Restaurante El Victoriano
- Hotel La Recolección and Restaurant La Esquina
- Ortiz-Gurdián Foundation Art Center.
The crisis that has been felt in the country since mid-April has caused multiple economic damages, forcing companies to suspend their activities. Among the cases that were reported at the end of June is the Mexican airline Volaris, which decided to temporarily suspend services to Managua, and the luxury hotel Mukul Auberge Resorts Collection, in the South Pacific, which also announced the indefinite closure of its operations.
Tour operators report the cancellation of almost 100% of the reserves for this year, and foresee that this situation will extend until 2019. In addition to the reported cancellations, the Mexican airline Volaris announced the suspension of its services to Managua as of July 1, and the luxury tourist resort Mukul, in Guacalito, decided to close its operations indefinitely.
Regarding the current situation of tourism companies and the cancellation recorded, the president of Antur, Claudia Aguirre, told Elnuevodiario.com.ni that ” …We are talking about 90% and 100%. We are reaching zero projection, that is to say, closing operations, operators are not receiving tourists, that is what we are seeing in reality. The operators have stopped receiving groups and we are facing cancellations that have been increasing.”
In relation to what could be done to recover the lost market, Aguirre said that ” …We are looking for actions to face the crisis, and work again when the crisis passes. We have learned and we are working with wholesale agents, they are telling us that they are taking the difficult decision to discontinue [working] with Nicaragua, but they tell us that they hope to return to the country when the situation has been resolved because it is a destination that the agencies have proven to be of interest because of its attractions. We already have a knowledge base of Nicaragua’s supply.”
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