Business group: Nicaragua's economy in 'free fall'

Nicaragua's economy is in "free fall" a year after anti-government protests were violently repressed by the government and its supporters, the country's leading business association said Wednesday.

Sectors such as tour operators, auto dealers and medical equipment providers have seen their sales fall 77.5%, 75% and 53.5%, respectively, in the past year, the Superior Council of Private Business said.

"We thought we were on the precipice, but the latest figures show that we lost our footing and are in free fall," said Guillermo Jacoby, an official with the association.

Protests began in April 2018 against cuts to social security pensions, but quickly spread to other grievances against the government of President Daniel Ortega. According to the Inter-American Commission on Human Rights, at least 325 people were killed in the government crackdown.

"The drop in consumption has been tremendous and reflects the crisis of confidence which exists in the country and creates a great deal of uncertainty in the economy," Jacoby said.

He characterized Nicaragua's economic state as one of "stagflation" characterized by high inflation and economic stagnation. He warned that new taxes drove down sales of agricultural inputs and products, which would likely lead to a significant reduction in how much land was planted and how much it produced.

In 2018, domestic investment dropped 25% and foreign investment plummeted 53%, Jacoby said. One area that increased was remittances, which rose 8% as Nicaraguans outside the country sent more money home.

The association said 100,000 people had lost jobs in the private sector in the past year. Last year, economists estimated that the economy overall had shed 200,000 jobs.

The business group said its report was based on data provided by private companies because the government has not provided access to its current figures.

Exports for the first three months of this year were down 6% from the same period last year.

"The panorama is negative in every sense," Jacoby said. "After the recession we will enter into a depression and deflation: There won't be cash flow, there won't be consumption and therefore there will be unemployment."