February 26, 2020 / 5:15 AM / a month ago

Nicaragua's economy contracts sharply amid political crisis: IMF

MANAGUA (Reuters) - Nicaragua’s economy suffered a deeper contraction in 2019 than a year earlier, the International Monetary Fund (IMF) estimated on Tuesday, amid a political crisis that is testing President Daniel Ortega’s hold on power in the Central American nation.

Once among the fastest-growing economies in Latin America, Nicaragua is now feeling the effects of deteriorating aggregate demand, strong fiscal consolidation and U.S. sanctions against members of Ortega’s family and senior members of his government, and their companies.

Nicaragua’s economy contracted 5.7% last year, compared 3.8% a year earlier, the IMF estimated, while inflation increased to 6.1%, compared to 3.9% a year earlier.

Anti-government protests began almost two years ago, evolving into a broader resistance movement against Ortega’s government.

Reporting by Ismael Lopez in Managua, Nicaragua; Writing by Stefanie Eschenbacher; Editing by Simon Cameron-Moore

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