Exchange Currency

Economy of Nicaragua

Nicaragua, the poorest country in Central America and the second poorest in the Western Hemisphere, has widespread underemployment and poverty.

The Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) has been in effect since April 2006 and has expanded export opportunities for many agricultural and manufactured goods.

Textiles and agriculture combined account for nearly 50% of Nicaragua's exports. The ORTEGA administration's promotion of mixed business initiatives, owned by the Nicaraguan and Venezuelan state oil firms, together with the weak rule of law, could undermine the investment climate for domestic and international private firms in the near-term.

Nicaragua relied on an IMF external credit facility to meet internal- and external-debt financing obligations.

The most recent IMF program ended in 2011 and Nicaragua is currently in negotiations for a new program. Nicaragua depends heavily on foreign development assistance, however, donors have curtailed this funding in response to November 2008 and subsequent electoral fraud.

Nicaragua still struggles with a high public debt burden, however, it succeeded in reducing that burden in 2011. The economy grew at a rate of about 4% in 2012.




Discover more about Nicaragua