Nicaragua Pays Millions in Foreign Debt, Receives Little New Capital

Nicaragua's external debt continues to climb, yet the nation struggles to secure substantial new capital for development. In the first quarter of 2026, the country's total public and private debt increased by $107.5 million. However, the net inflow of fresh funds was a mere $11.5 million, calculated by subtracting the $878.9 million in debt service payments from the $890.4 million in total disbursements received.

The public sector fared better than the private sector, registering a positive net flow of $18.6 million. In contrast, private entities experienced a negative flow of $7.2 million. This occurred even though the private sector handled significantly larger transaction volumes, between 3.5 and 4 times that of the public sector. Financial sector professionals noted that while private sector capital inflows are generally positive for job creation, the overall situation indicates a slowdown in international financing operations for Nicaraguan businesses.

Confidence from foreign commercial banks in Nicaraguan private banks is evident, as indicated by the substantial amounts handled. However, this confidence appears conditional. Disbursements of external debt to the private sector fell by $282.6 million (-28.8%) compared to the first quarter of 2025, totaling $697.4 million. The private sector's debt service payments also decreased by 30.7% ($312.2 million) year-on-year, reaching $704.6 million.

Further analysis of the debt reveals that 71.1% of the total disbursements, amounting to $500.8 million, were short-term. The remaining $196.6 million were contracted on medium and long-term bases. The minimal capital outflow from the private sector might be a seasonal fluctuation, which subsequent reports will clarify.