Nicaragua Economy Profile 2008

Economy - overview

Nicaragua has widespread underemployment, one of the highest degrees of income inequality in the world, and the third lowest per capita income in the Western Hemisphere. While the country has progressed toward macroeconomic stability in the past few years, annual GDP growth has been far too low to meet the country's needs, forcing the country to rely on international economic assistance to meet fiscal and debt financing obligations. In early 2004, Nicaragua secured some $4.5 billion in foreign debt reduction under the Heavily Indebted Poor Countries (HIPC) initiative, and in October 2007, the IMF approved a new poverty reduction and growth facility (PRGF) program that should create fiscal space for social spending and investment. The continuity of a relationship with the IMF reinforces donor confidence, despite private sector concerns surrounding ORTEGA, which has dampened investment. 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. Energy shortages fueled by high oil prices, however, are a serious bottleneck to growth.

GDP (purchasing power parity)

$18.17 billion (2007 est.)

GDP (official exchange rate)

$5.675 billion (2007 est.)

GDP - real growth rate

2.9% (2007 est.)

GDP - per capita (PPP)

$3,200 (2007 est.)

GDP - composition by sector

agriculture: 17.1%
industry: 25.9%
services: 56.9% (2007 est.)

Population below poverty line

48% (2005)

Household income or consumption by percentage share

lowest 10%: 2.2%
highest 10%: 33.8% (2001)

Inflation rate (consumer prices)

9.8% (2007 est.)

Investment (gross fixed)

28.8% of GDP (2007 est.)

Labor force

2.262 million (2007 est.)

Labor force - by occupation

agriculture: 29%
industry: 19%
services: 52% (2006 est.)

Unemployment rate

5.6% plus underemployment of 46.5% (2007 est.)

Distribution of family income - Gini index

43.1 (2001)

Budget

revenues: $1.027 billion
expenditures: $1.336 billion (2007 est.)

Public debt

56.2% of GDP (2007 est.)

Industries

food processing, chemicals, machinery and metal products, textiles, clothing, petroleum refining and distribution, beverages, footwear, wood

Industrial production growth rate

3% (2007 est.)

Electricity - production

2.778 billion kWh (2006)

Electricity - consumption

2.929 billion kWh (2006)

Electricity - exports

8 million kWh (2005)

Electricity - imports

69.34 million kWh (2006)

Oil - production

0 bbl/day (2005 est.)

Oil - consumption

28,000 bbl/day (2005 est.)

Oil - imports

15,560 bbl/day (2005 est.)

Oil - exports

1,397 bbl/day (2004)

Oil - proved reserves

0 bbl (1 January 2006 est.)

Natural gas - production

0 cu m (2005 est.)

Natural gas - consumption

0 cu m (2005 est.)

Natural gas - exports

0 cu m (2005 est.)

Natural gas - imports

0 cu m (2005)

Natural gas - proved reserves

0 cu m (1 January 2006 est.)

Current Account Balance

-$754 million (2007 est.)

Agriculture - products

coffee, bananas, sugarcane, cotton, rice, corn, tobacco, sesame, soya, beans; beef, veal, pork, poultry, dairy products; shrimp, lobsters

Exports

$2.235 billion f.o.b.; note - includes free trade zones (2007 est.)

Exports - commodities

coffee, beef, shrimp and lobster, tobacco, sugar, gold, peanuts

Exports - partners

US 65.2%, El Salvador 6.9%, Honduras 3.8% (2006)

Imports

$3.647 billion f.o.b. (2007 est.)

Imports - commodities

consumer goods, machinery and equipment, raw materials, petroleum products

Imports - partners

US 20.1%, Mexico 13.9%, Venezuela 9.4%, Costa Rica 6.9%, Guatemala 5.4%, China 4.3% (2006)

Reserves of foreign exchange and gold

$1.075 billion (31 December 2007 est.)

Debt - external

$3.702 billion (31 December 2007 est.)

Market value of publicly traded shares

$NA

Economic aid - recipient

$471 million (2006 est.)

Currency (code)

gold cordoba (NIO)

Exchange rates

gold cordobas per US dollar - 18.457 (2007), 17.582 (2006), 16.733 (2005), 15.937 (2004), 15.105 (2003)

Fiscal year

calendar year