Nicaragua’s booming cigar market is expected to reach $2.5 billion in 2018, up from $1.3 billion in 2016, according to analysts from Macquarie Securities.
According to the analysts, there will be a 30% increase in sales in 2018 compared to 2017, but not enough to compensate for a 60% drop in imports.
The country’s trade surplus with China will likely rise to $1 billion in 2019.
The analysts also expect the country’s foreign exchange reserves to increase by $250 million in 2019, with a potential to increase further if the government approves a package of tax cuts and social welfare reforms.
“A combination of low oil prices, a devalued currency and a favorable domestic market is likely to continue to support the cigar industry,” Macquarrie Securities analyst Alexey Mihailovsky said.
“The cigar market will remain strong in 2019.”
Mihaylovsky expects that the cigar market in 2018 will be the third-biggest in Latin America behind Venezuela and Colombia, as Venezuela’s market is estimated to reach nearly $2 billion in 2020.
Nicaragua’s economy has been growing steadily in recent years.
In 2017, the country recorded a $1,000 increase in GDP.
The growth has been fueled by a massive growth in the economy, which accounts for more than 60% of the countrys total economic output.