A Nicaraguan worker has an average monthly income, according to the minimum wage, of 7,000 cordobas, the equivalent of $200.
- VOA courtesy photo.

Published Tuesday, August 11, 2020

Nicaraguans struggle to survive amid
economic crisis and pandemic

By the A.M. Costa Rica wire services

The British research and analysis firm Economist Intelligence Unit recently assured that the social crisis that Nicaragua has been experiencing since 2018, adding to the covid-19 pandemic, threatens to push the country into its deepest economic depression since the 1980s, according to Daliana Ocaña's reporter of Voice of America Journal.

According to Ocaña, the country, which has been in recession for two years, faces a grim outlook in 2020, which has its citizens struggling to survive amid poverty and unemployment.

An example is Fátima Ramírez, who sells enchiladas in a popular market in Managua. She says that in previous years she was able to sell between 30 and 50 units, but that total has dropped to less than 10. This, in turn, reduced the investment in her basic shopping basket from about the equivalent of $100 to less than $50.

"It is not only due to the pandemic but because of so many things that people are losing their jobs, there is no work, there is nothing, there is nowhere to get out of it," lamented the woman, whose income is not even remotely close to the price of the basic food basket in Nicaragua.

Currently, the total cost of the basic basket exceeds 14,000 córdobas per month, about $470, of which more than 9,000 are for food, according to data from the Central Bank of Nicaragua, which has not been updated since July 2019.

A Nicaraguan worker has an average monthly income, according to the minimum wage, of 7,000 cordobas, the equivalent of $200.

Those who belong to the poorest sectors, such as Ramírez, must juggle the money they earn to support and feed their families.

The economist Luis Murillo confirmed to the Voice of America that the economic outlook and consumption levels will continue to fall in the country.

"Today consumption may have contracted by more than 15%, unemployment levels above 15%, a negative economic growth rate of at least 5 percent," Murillo said.

Meanwhile, international institutions such as The Economist Intelligence Unit and the International Monetary Fund have warned that this year the Gross Domestic Product of Nicaragua will contract between minus 6 and 8 percent.

The World Bank forecasts a drop of -4.3%. This lower figure is explained, in part, by the fact that the bank's economists' calculation is based more on external dynamics than on internal ones that will affect the country.

In its Biannual Report for Latin America and the Caribbean region, the World Bank notes that, after showing disappointing economic performance over the last five years, it is expected that "the difficulties of the crisis will be enormous for large segments of the population" Latin American and the Caribbean.

In the case of Nicaragua, they point out that “the recession is expected to worsen in 2020 due to the covid-19 outbreak, further halting the progress made in reducing poverty since 2005 due to a particularly severe contraction of employment in sectors intensive in the workforce and stagnant wages.”

The report adds that "a slow recovery is expected amid the global rebound, hampered by a tight financial situation and political uncertainty."

Editor's note: The dictator Daniel Ortega-Saavedra has been in control of the country since 2007, implementing policies to achieve leftist reforms across Nicaragua.

How could the Nicaraguans depose Daniel Ortega without having the support of the army?  We would like to know your thoughts on this story. Send your comments to news@amcostarica.com