Economy Nicaragua
Economy - overview:
Nicaragua, one of the hemisphere's poorest countries, faces low per capita income, massive unemployment, and huge external debt. Distribution of income is one of the most unequal on the globe. While the country has made progress toward macroeconomic stability over the past few years, GDP annual growth of 1.5% - 2.5% has been far too low to meet the country's need. Nicaragua will continue to be dependent on international aid and debt relief under the Heavily Indebted Poor Countries (HIPC) initiative. Nicaragua has undertaken significant economic reforms that are expected to help the country qualify for more than $4 billion in debt relief under HIPC in early 2004. Donors have made aid conditional on the openness of government financial operation, poverty alleviation, and human rights. A three-year poverty reduction and growth plan, agreed to with the IMF in December 2002, guides economic policy.
GDP:
purchasing power parity - $11.6 billion (2004 est.)
GDP - real growth rate:
2.3% (2004 est.)
GDP - per capita:
purchasing power parity - $2,300 (2004 est.)
GDP - composition by sector:
agriculture: 28.9%
industry: 25.4%
services: 45.7% (2004 est.)
Investment (gross fixed):
28.1% of GDP (2004 est.)
Population below poverty line:
50% (2001 est.)
Household income or consumption by percentage share:
lowest 10%: 0.7%
highest 10%: 48.8% (1998)
Distribution of family income - Gini index:
60.3 (1998)
Inflation rate (consumer prices):
5.3% (2004 est.)
Labor force:
1.91 million (2004 est.)
Labor force - by occupation:
agriculture 42%, industry 15%, services 43% (1999 est.)
Unemployment rate:
22% plus considerable underemployment (2004 est.)
Budget:
revenues: $672.5 million
expenditures: $954.9 million, including capital expenditures of $NA (2004 est.)
Public debt:
125.3% of GDP (2004 est.)
Agriculture - products:
coffee, bananas, sugarcane, cotton, rice, corn, tobacco, sesame, soya, beans; beef, veal, pork, poultry, dairy products
Industries:
food processing, chemicals, machinery and metal products, textiles, clothing, petroleum refining and distribution, beverages, footwear, wood
Industrial production growth rate
The Economy in Nicaragua
Nicaragua’s economy is mainly focused on the agricultural industry. However, as the poorest country in Central America and the second poorest in the hemisphere, has widespread underemployment and poverty. The US-Central America Free Trade Agreement (CAFTA) has been in effect since April 2006 and has expanded export opportunities for many agricultural and manufactured goods. Textiles and apparel account for nearly 60% of Nicaragua’s exports, but increases in the minimum wage during the Ortega administration will likely erode its comparative advantage in this industry
