Nica Act expected to impact Nicaragua's economic growth

According to Funides Director General Juan Sebastián Chamorro, the proposed United States law known as the Nica Act would provoke a decline in public sector investment and would reduce investments by 5 percent between 2018 and 2020 (Estrategia y Negocios, 12 October 2016). The study, organized by Funides, was presented to a group of Nicaraguan entrepreneurs and economists. Some scenarios from the study concluded between 1 to 1.5 percent of economic growth would be affected by the Act (Nuevo Diario). Chamorro identified three scenarios the country could face: Nica Act isn’t approved; the Act isn’t approved, but indirectly creates adverse economic expectations among investors; and the direct and indirect impact if the Act is approved, which would impact the public sector and generate adverse economic expectations among investors. The study concludes that to guarantee future growth, the country should strengthen institutions and improve the rule of law.