Nicaragua’s economy has seen mixed performance in recent years. Following significant growth in 2024,the country’s gross domestic product (GDP) growth dropped from 3.6% to 3.1% in 2025. This decline was primarily due to slowed remittances, limited investment and global economic deceleration. Despite this slowdown, the economy will expand by 4% this year, supported by sound fiscal and monetary policies and increased remittances, according to the International Monetary Fund (IMF).
Nicaragua’s central government is expected to ease budgetary restrictions, prioritizing public investment and social spending. If this continues, its fiscal surplus will reach 1.6% of GDP. “Staff is advised to proceed cautiously with budget execution in line with staff’s baseline projection, in light of uncertainty over trade policies and shifts in the availability of external financing,” an IMF report reads. “Over the medium term, staff project a fiscal surplus of 2.25% of GDP, with the public debt ratio remaining on a firmly downward trend.”
Remittance growth is projected to slow significantly or decline, potentially falling to $5.938 billion—a decrease from 2025 highs, as estimated by the IMF. This slowdown is driven by reduced migration, exhausted savings, and high migration-related costs, leading to an estimated 5.97% drop if U.S. deportation policies intensify.
The IMF projects stronger domestic demand for Nicaragua. However, risks remain, including “lower global growth, a deterioration in the terms of trade, natural disasters, stricter and wider international sanctions and a change in immigration policies in the U.S.,” the IMF reported. “In addition, going forward, domestic and international political developments, and deterioration of the rule of law may also impact economic performance by potentially increasing the cost of doing business.”
Customers in Nicaragua are paying six days beyond terms on average, per the FCIB Credit and Collections Survey. For all survey respondents in business in Nicaragua, central bank issues were the most common reasons behind payment delays from their customers.
“We are experiencing longer processing times for our bank to deposit funds originating from Nicaragua,” one respondent wrote. “It appears that additional KYC procedures have been implemented for inbound remittances.”
“Know your customer, the culture and the governmental challenges,” wrote another.
