Country Presentation 2018 OUR SERVICES Information about - PowerPoint PPT Presentation

Country Presentation ● 2018

OUR SERVICES • Information about • Identification of options • Facilitate and expedite Nicaragua and business for locations for real government procedures opportunities • Information about estate • Customized information • Directory of suppliers of business opportunities in packages related goods and the Caribbean Coast • Organization of site visits: services through our regional meetings with companies • Support and facilitation office PRONiCaribe and institutions • Support with information on the structure of operational costs and fiscal charges Assessment and Implementation of Aftercare decision making the project PRONicaragua is the Official Investment Promotion Agency of the Government of Nicaragua.

COUNTRY PROFILE Capital Managua Area 130,373 km 2 Official Language Spanish Population 6.3 million Currency Córdoba Exchange Rate (2018 Average) C$31.55 = US$1.00 Time Zone UTC/GMT – 6 hours Región Central / Central Region Región Pacífico/ Pacific Region Región Caribe/ Caribbean Region Source: BCN

STRATEGIC LOCATION

2017 ECONOMIC OUTLOOK Gross Domestic Product US$13.86 billion (4.7% - 5.2% growth vs 2016) GDP per capita US$2,167.3 Exports US$5.20 billion FDI Inflows* US$1.44 billion Gross International Reserves US$2.76 billion (2.6 times the monetary base) Inflation 5.0-6.0% Devaluation of Currency 5% annual vs. US Dollar Sources: BCN, MIFIC, and PRONicaragua. *2016 data

ECONOMIC GROWTH Gross Domestic Product Real GDP Growth (%) 16.00 2013 2014 2015 2016 2017 13.86 14.00 13.23 12.74 4.9 4.8 4.9 4.7 4.7-5.2 11.88 12.00 10.98 10.53 9.77 10.00 8.75 US$ Billion 8.49 8.29 8.00 6.00 4.00 2.00 0.00 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* According to the Economic Commission for Latin America and the Caribbean, Nicaragua will be the third fastest growing country in Latin America and the Caribbean in 2018, after Panama and the Dominican Republic. Source: BCN. *Projection .

GDP GROWTH IN THE REGION HONDURAS GDP 2017: 3.9% GUATEMALA Average of 5 years: 3.4% GDP 2017: 3.2% Average of 5 years: 3.7% NICARAGUA EL SALVADOR GDP 2017: 4.7-5.2% GDP 2017: 2.4% Average of 5 years: 5.2% Average of 5 years: 2.1% PANAMA GDP 2017: 5.3% COSTA RICA Average of 5 years: 5.7% GDP 2017: 3.9% Average of 5 years: 3.6% Source: BCN and CEPAL

ECONOMIC STABILITY Nicaragua maintains positive relations with different multilateral organizations such as the International Monetary fund (IMF), World Bank (WB), the Inter-American Development Bank (IDB), and the Central American Bank for Economic Integration (BCIE). • On February 2018: Standard & Poor's ratified B+ for credit ratings, local and foreign currency. The outlook is stable. • On July 2017 : Moody´s updated Nicaragua's credit rating outlook from "stable" to "positive" and maintained the rating on B2 . • On August 2017: Fitch Ratings ratified the B+ rating to Nicaragua with stable outlook. “ ¨ The macroeconomic policies implemented by the Government of Nicaragua are positive, and should serve as an example for Latin America” Min Zhu, Deputy Managing Director of the IMF

EVOLUTION OF FOREIGN DIRECT INVESTMENT Foreign Direct Investment Inflows 16% compound annual growth rate 1.60 1.45 1.44 1.38 1.36 1.40 1.24 1.20 0.94 1.00 US$ Billion 0.80 0.63 0.60 0.51 0.43 0.38 0.40 0.20 - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016* In 2016, it is expected that the sectors that have attracted higher FDI revenues are: industry, financial, trade and services, telecommunications, and energy. Source: MIFIC, BCN and PRONicaragua. * Estimated data.

EVOLUTION OF EXPORTS Total Exports 7% compound annual growth rate 6.00 5.20 5.20 4.92 4.83 4.84 4.79 5.00 4.30 US$ Billion 4.00 3.44 2.75 3.00 2.63 2.00 1.00 0.00 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* In 2017, the main export destinations were: the United States, Central America, Mexico, the European Union, and Venezuela. Source: BCN. *Projection .

MAIN EXPORT PRODUCTS 2016 Main Export Products (% of total value) Textile and Apparel (31.6%) Cigars and Tobacco (4.1%) Dairy Products (3.7%) Automotive Harnesses (13.7%) Bovine Meat (8.7%) Sugar (2.2%) Coffee (8.3%) Peanuts (1.6%) Gold (7.4%) Beans (1.3%) Source: BCN and CNZF

AN IDEAL EXPORT PLATFORM Access to 1.5 billion people Free Trade Agreements Preferential Access Agreements Solidarity Union Agreements Central American Common Market Agreements under Negotiation Source: MIFIC

MARKET ACCESS Nicaragua constantly seeks to increase its access to the world’s most important markets in order to consolidate itself as the ideal export platform. Agreements Countries United States, Mexico, Panama, Taiwan, Dominican Free Trade Agreements Republic, Chile, South Korea & European Union. Nicaragua, Guatemala, El Salvador, Honduras & Costa Rica. Central American Common Market Additionally, free movement of capital, services and human resources among CA-4 countries. Generalized System of Preferences Japan, Norway, Canada, Russia and Switzerland. Venezuela, Ecuador, Granada, Saint Lucia, Bolivia, Cuba, ALBA agreement Antigua & Barbuda, Dominica, and Saint Vicente and the Grenadines. Canada, Peru, Bolivia, Agreements under Negotiation ALADI (Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, Venezuela, and Cuba). Source: MIFIC

SAFETY INDICATORS Crime and Theft as a Major Problem for Doing Business in America in 2017 El Salvador 19.5 Homicide Rate in Central America Jamaica 15.5 (per every 100,000 inhabitans) Guatemala 14.0 Honduras 13.9 2015 2016 Mexico 12.9 120 101 Dominican R. 10.8 100 Peru 8.0 81 80 Venezuela 7.5 59 57 Panama 60 5.6 35 Colombia 5.6 40 27 United States 4.9 12 11 11 9 20 8 7 Paraguay 4.0 0 Chile 3.4 Nicaragua Panamá Costa Rica Guatemala Honduras El Salvador Brazil 1.9 Uruguay 1.7 Costa Rica 1.4 Nicaragua 1.0 Ecuador 0.9 Argentina 0.7 Canada 0.0 0.0 5.0 10.0 15.0 20.0 25.0 Sources: Commission of Police Chiefs and Directors of Central America, Mexico , the Caribbean and Colombia; World Economic Forum.

LABOR FORCE Average of Formal Employment 1000 913 857 900 773 800 710 Thousands of employees 673 700 623 578 600 535 504 493 500 400 300 200 100 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017** Indicators Population under 39 years old 76.1% Unemployment* 3.6% Labor Force 3.2 million Underemployment* 42.5% Source: BCN and INSS. *ECH – INIDE - Third quarter 2017. **Average data to October 2017.

2017 - 2018 MINIMUM WAGE Salaries include social benefits (49%) Sector Monthly in US$ Hourly in US$ Construction, Financial Establishments and Insurance 418.76 2.01 Electricity, Gas and Water, Commerce, Restaurants and Hotels, 343.22 1.65 Transport, Warehouse and Communications Mines and Quarry 336.06 1.61 Fishing 284.52 1.36 Free Zones Regime Industry 257.87 1.24 Community, Social, Domestic and Personal Services 262.32 1.26 Manufacturing Industry 251.60 1.21 Central and Municipal Government 233.35 1.12 Micro and Small Craft Industry and National Tourism 201.05 0.96 Agricultural* 187.12 0.90 Source: MITRAB. *Does not include food. 2017 Average exchange rate C$30.05 = US$1. Valid from 09/01/2017

MODEL OF DIALOGUE AND CONSENSUS The Government of Nicaragua, the private sector and workers coordinate efforts and design strategies to: 1. Promote economic development 2. Generate new decent jobs 3. Reduce poverty Governmental entity chaired by the President with government and private sector representatives, to follow up on agreements and promote better working relationships. The model of dialogue and Signing of tripartite More than 100 laws passed consensus has been agreement between by consensus with the included in the article 101 of government, private sector Superior Council of the the Political Constitution of and union leaders to fix Private Enterprise (COSEP). Nicaragua. minimum wage increases and social responsibility strategies in the long term.

DEVELOPING THE ENERGY SECTOR Goal 2020 Since 2007, the Nicaraguan government has proposed to increase generation capacity, expand coverage, and create green energy as part of its country development strategies. 2018* 2007 45% 46% 29% 55% 54% 71% Installed Capacity: 819 MW Installed Capacity: 1,500 MW Installed Capacity: 1,942 MW Hydrocarbons Renewable Energy Installed capacity has increased 83% from 2007 to 2018. The coverage reached 94% of the national territory in 2018 vs 52% in 2007 . Source: INE Fuente: Instituto Nicaragüense de Energía (INE).*Datos a Septiembre 2015 *Data to January 2018