Nicaragua: Economy (2024)

FAQs

Does Nicaragua have a strong economy? ›

Updated October 2023

The country's economic freedom score is lower than the world and regional averages. Nicaragua's economy is considered “mostly unfree” according to the 2024 Index. Efforts to improve macroeconomic stability and economic growth have been modest.

The economy of Nicaragua is focused primarily on the agricultural sector. Nicaragua itself is the least developed country in Central America, and the second poorest in the Americas by nominal GDP.

Nicaragua remains the second-poorest country in the Western Hemisphere, despite averaging over four percent GDP growth annually since 1995. Nicaragua's GDP per capita reached approximately $2,100 in 2021.

Nicaragua's geographical position as a possible canal route through Central America and its wealth of natural resources captured U.S. interest soon after the country gained independence from Spain in 1821.

Without question, and perhaps contrary to popular belief, Nicaragua is a stable, safe, and peaceful country for investment. There is no doubt that Nicaragua is a developing country, but that does not constitute it being unsafe.

It has been rapidly becoming a popular place in the minds of many ex-pats who seek retirement abroad in Nicaragua. This region has great opportunities with low property taxes and an affordable income. It is considered one of the safest countries in Central America.

Nicaragua's location and climate have made it prone to a host of natural disasters including volcanic eruptions, earthquakes, floods, droughts, and hurricanes. This, along with massive deforestation and a history of political and economic repression, accelerates the cycle of poverty.

Nicaragua is the largest country in Central America, covering 130,373 square kilometers. Its economy relies on producing light manufacturing, services, and agriculture.

Nicaragua, known as the jewel of Central America, shines brightly on the Happy Planet Index (HPI) for its outstanding quality of life. Developed by the Hot or Cool Institute in Berlin, this index highlights countries that prioritize citizen well-being, life expectancy, and sustainability.

Carlos Pellas Chamorro is a Nicaraguan businessman. The controlling shareholder of Grupo Pellas, Pellas is Nicaragua's first billionaire.

Is Nicaragua considered Third World? ›

Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, and Panama are all considered part of the developing world. The term developing world is one of many terms used to describe these countries.

Russia is the sole successor to the Soviet Union, so ties have naturally continued with Russia since the Belavezha Accords. Russia has an embassy in Managua. Nicaragua has an embassy in Moscow. The USSR developed great relations with the Sandinistas after the overthrow of the Somoza family.

The US is the only donor to operate independently of the Nicaraguan government's influence. If the US was to withdraw, it would severely damage the democracy movement, broader civil society and women's rights groups.

Thompson says, “…. in 2001, Cuba was the third poorest country in Latin America as measured by per capita GDP. Only Nicaragua and the poorest-of-the poor Haiti ranked lower.”

Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, and Panama are all considered part of the developing world. The term developing world is one of many terms used to describe these countries.

The United States remains Nicaragua's top economic partner, buying 50 percent of Nicaraguan exports and supplying 27 percent of its imports, and sending 67 percent of its remittances. Total (two-way) goods trade between the two countries was $6.8 billion in 2021.

◦ Nicaragua is known as the land of fire and water because it has numerous volcanoes and lakes, as well as two coastlines. ◦There are 19 active and extinct volcanoes on the Pacific side of the country. ◦ Spanish is the official language and is spoken by most people in Nicaragua.