Analysis of alternative routes of public investment in agriculture and their impact on economic growth and rural poverty reduction in Nicaragua

In the face of the economic downturn that Nicaragua experienced in 2018 and the need for recovery, this study provides a comparative analysis of how investments in productive infrastructure in different agri-food sectors would impact growth and poverty. The analysis is based on scenarios generated through an economy-wide model representing the Nicaraguan economy and its sectors, including financing constraints and different options for the new investments.The scenarios look specifically at the impact of increasing public investment on the productive infrastructure of the agricultural sector (roads, irrigation systems, storage systems, research and technology, etc.) for the 20202028 period.The study finds that, depending on the investment scenario, total poverty in rural areas could decrease by 0.5 to 2.25 percentage points, while extreme poverty could decrease by 0.16 to 0.31 percentage points. Putting said investments into practice would give the government a concrete alternative to reactivate the economy and reduce rural poverty under existing economic constraints