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Nicaragua Economy
 
 
 

General

Nicaragua is among the poorest countries in the Americas. Gross Domestic Product (GDP) in purchasing power parity (PPP) in 2008 was estimated at $17.37 billion. Agriculture represents 17% of GDP, the highest percentage in Central America. Remittances account for over 15% of the Nicaraguan GDP. Close to $1 billion are sent to the country by Nicaraguans living abroad. The economy grew at a rate of about 4% in 2011.

Nicaragua is primarily an agricultural country; agriculture constitutes 60% of its total exports which annually yield approximately $2 billion. Nearly two-thirds of the coffee crop comes from the northern part of the central highlands, in the area north and east of the town of Estelí. Soil erosion and pollution from the heavy use of pesticides have become serious concerns in the cotton district. Yields and exports have both been declining since 1985. Today most of Nicaragua's bananas are grown in the northwestern part of the country near the port of Corinto; sugar cane is also grown in the same district. Cassava, a root crop somewhat similar to the potato, is an important food in tropical regions. Cassava is also the main ingredient in tapioca pudding. Nicaragua's agricultural sector has benefited because of the country's strong ties to Venezuela. It is estimated that Venezuela will import approximately $200 million in agricultural goods. In the 1990s, the government initiated efforts to diversify agriculture. Some of the new export-oriented crops were peanuts, sesame, melons, and onions.

Mining is not a major industry in Nicaragua, contributing less than 1% of gross domestic product (GDP). Restrictions are being placed on lumbering due to increased environmental concerns about destruction of the rain forests. But lumbering continues despite these obstacles; indeed, a single hardwood tree may be worth $2,000.

The service sector was estimated to account for 56.8% of the country's GDP, and employs 52% of the active population. This section includes transportation, commerce, warehousing, restaurant and hotels, arts and entertainment, health, education, financial and banking services, telecommunications as well as public administration and defence.

Tourism in Nicaragua is one of the most important industries in the country. By 2006, tourism in Nicaragua had become the second largest industry in the nation, over the last seven years tourism has grown about 70% nationwide with rates of 10-16% annually. Nicaragua had seen positive growth in the tourism sector over the last decade, and it became the largest industry in 2007. The increase and growth led to the income from tourism to rise more than 300% over a period of 10 years. The growth in tourism has also positively affected the agricultural, commercial, and finance industries, as well as the construction industry. The majority of tourists who visit Nicaragua are from the US, Central or South America and Europe. According to the Ministry of Tourism, the colonial cities of León and Granada are the preferred spots for tourists. Also, the cities of Masaya, Rivas and the likes of San Juan del Sur, San Juan River, Ometepe, Mombacho Volcano, the Corn Islands, and others are main tourist attractions. In addition, ecotourism and surfing attract many tourists to Nicaragua. As a result of increased tourism, Nicaragua has seen its foreign direct investment increase by 79.1% from 2007 to 2009.

Nicaragua is currently a member of the Bolivarian Alliance for the Americas, which is also known as ALBA. ALBA has proposed creating a new currency, the sucre for use among its members. In essence, this means that the Nicaraguan córdoba will be replaced with the sucre. Other nations that will follow a similar pattern include: Venezuela, Ecuador, Bolivia, Honduras, Cuba, Saint Vincent and the Grenadines, Dominica and Antigua and Barbuda.

Overview

Economy - overview : 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.
GDP (purchasing power parity) : $27.1 billion (2012 est.)
GDP (official exchange rate) : $10.51 billion (2012 est.)
GDP - real growth rate : 5.2% (2012 est.)
GDP - per capita (PPP) : $4,500 (2012 est.)
GDP - composition, by end use : household consumption: 86.1%

government consumption: 10.3%

investment in fixed capital: 32.8%

exports of goods and services: 39.8%

imports of goods and services: -69.1% (2012 est.)
GDP - composition by sector : agriculture: 17.3%

industry: 25.9%

services: 56.8% (2012 est.)
Labour force : 2.961 million (2012 est.)
Labour force - by occupation : agriculture: 28%

industry: 19%

services: 53% (2010 est.)
Unemployment rate : 7.4% (2012 est.)

note: underemployment was 46.5% in 2008
Population below poverty line : 42.5% (2009)
Household income or consumption by percentage share : lowest 10%: 1.4%

highest 10%: 41.8% (2005)
Distribution of family income - Gini index : 40.5 (2010)
Budget : revenues: $2.728 billion

expenditures: $2.752 billion (2012 est.)
Taxes and other revenues : 26% of GDP (2012 est.)
Budget surplus (+) or deficit (-) : -0.2% of GDP (2012 est.)
Public debt : 59.4% of GDP (2012 est.)

note: official data; data cover general Government Debt, and includes debt instruments issued (or owned) by Government entities other than the treasury; the data include treasury debt held by foreign entities, as well as intra-governmental debt; intra-governmental debt consists of treasury borrowings from surpluses in the social funds, such as retirement, medical care, and unemployment, debt instruments for the social funds are not sold at public auctions; Nicaragua rebased its GDP figures in 2012, which reduced the figures for debt as a percentage of GDP
Inflation rate (consumer prices) : 7.2% (2012 est.)
Central bank discount rate : 3% (31 December 2010 est.)
Commercial bank prime lending rate : 11.99% (31 December 2012 est.)
Stock of narrow money : $1.31 billion (31 December 2012 est.)
Stock of broad money : $3.136 billion (31 December 2011 est.)
Stock of domestic credit : $4.567 billion (31 December 2012 est.)
Market value of publicly traded shares : $NA
Agriculture - products : coffee, bananas, sugarcane, rice, corn, tobacco, sesame, soya, beans; beef, veal, pork, poultry, dairy products; shrimp, lobsters, cotton
Industries : food processing, chemicals, machinery and metal products, knit and woven apparel, petroleum refining and distribution, beverages, footwear, wood, electric wire harness manufacturing, mining
Industrial production growth rate : 6% (2012 est.)
Electricity - production : 3.824 billion kWh (2011 est.)
Electricity - consumption : 2.941 billion kWh (2011 est.)
Electricity - exports : 40,560 kWh (2011 est.)
Electricity - imports : 9,930 kWh (2011 est.)
Crude Oil - production : 0 bbl/day (2011 est.)
Crude Oil - exports : 0 bbl/day (2011 est.)
Crude Oil - imports : 16,020 bbl/day (2011 est.)
Crude Oil - proved reserves : 0 bbl (1 January 2012 est.)
Refined petroleum products - production : 14,680 bbl/day (2008 est.)
Refined petroleum products - consumption : 30,690 bbl/day (2011 est.)
Refined petroleum products - exports : 999.6 bbl/day (2011 est.)
Refined petroleum products - imports : 15,830 bbl/day (2011 est.)
Natural gas - production : 0 cu m (2012 est.)
Natural gas - consumption : 0 cu m (2012 est.)
Natural gas - exports : 0 cu m (2012 est.)
Natural gas - imports : 0 cu m (2012 est.)
Natural gas - proved reserves : 0 cu m (1 January 2012 est.)
Current account balance : -$1.476 billion (2012 est.)
Exports : $4.157 billion (2012 est.)
Exports - commodities : coffee, beef, gold, sugar, peanuts, shrimp and lobster, tobacco, cigars, automobile wiring harnesses, textiles, apparel, cotton
Exports - partners : US 54%, Canada 8.4%, Venezuela 7.4%, El Salvador 4.5% (2012)
Imports : $6.45 billion (2012 est.)
Imports - commodities : consumer goods, machinery and equipment, raw materials, petroleum products
Imports - partners : US 18.8%, Venezuela 14.4%, Mexico 12.1%, Costa Rica 8.8%, China 7.8%, Guatemala 7.6%, El Salvador 5.1% (2012)
Reserves of foreign exchange and gold : $1.887 billion (31 December 2012 est.)
Debt - external : $7.926 billion (31 December 2012 est.)
Exchange rates : cordobas (NIO) per US dollar - 23.547 (2012 est.); 22.424 (2011 est.); 21.356 (2010 est.); 20.34 (2009); 19.374 (2008)
Fiscal year : calendar year

 

 

 
 

 



 


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