MANAGUA, July 29 (Xinhua) -- Nicaragua's protracted political crisis, which has lasted well over three months, is impairing economic growth, according to the central bank.
Central bank chief Ovidio Reyes said recently the initial 4.9 percent growth forecast in gross domestic product (GDP) for 2018 could fall as low as 1 percent if ongoing protests continue to disrupt daily life.
Up to June, the central bank registered economic losses of 430 million U.S. dollars due to the crisis, with the lost revenue in tourism alone hitting 231 million dollars.
Sunday marked 103 days since the ruling Sandinista National Liberation Front announced social security reforms on April 18, which increased taxes and cut benefits, sparking often violent clashes between anti-government protesters and security forces.
While the government was quick to rescind the reforms and call for national dialogue with the opposition, the protests have continued, with the opposition demanding the ouster of President Daniel Ortega.
According to official figures, more than 100 people have been killed in the clashes. Local human rights groups, however, have put the number at more than 300. There are victims on both sides.
Official data shows the Central American country's economy expanded 4.9 percent in 2017, driven by tourism, exports and remittances from Nicaraguans living and working abroad.
The Nicaraguan Foundation for Economic and Social Development (Funides), a private-sector group, predicted GDP will fall by 2 percent if the political unrest persists through the end of the year.
The sectors that would sustain the biggest losses include trade, tourism and construction, according to a Funides report.
Barricades along major avenues have interrupted deliveries of goods for days. The president of the Nicaraguan Dairy Chamber, Wilmer Fernandez, said roadblocks led to losses of 1 million dollars over a three-day period in May, by preventing the shipping of perishable products.
After security forces dismantled roadblocks from highways, the outlook appears more "optimistic" than in May, when Nicaragua's monthly economic activity index showed a 4.9-percent drop, the central bank's Reyes said.
"In July and August of this year, we expect the economy to be able to retake the path of growth," Reyes said.
The services sector was the worst hit, particularly hotels and restaurants, according to the bank.
Political uncertainty has prompted Nicaraguans to withdraw an estimated 600 to 700 million dollars from their bank accounts, official sources say.
Meanwhile, the government withdrew up to 100 million dollars from the central bank reserves as of June to pay for "unforeseen expenses" amid the protests.
