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Nicaragua vs. Costa Rica

Economy

NicaraguaCosta Rica
Economy - overview

Nicaragua, the poorest country in Central America and the second poorest in the Western Hemisphere, has widespread underemployment and poverty. GDP growth of 4.5% in 2017 was insufficient to make a significant difference. Textiles and agriculture combined account for nearly 50% of Nicaragua's exports. Beef, coffee, and gold are Nicaragua’s top three export commodities.

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

In 2013, the government granted a 50-year concession with the option for an additional 50 years to a newly formed Chinese-run company to finance and build an inter-oceanic canal and related projects, at an estimated cost of $50 billion. The canal construction has not started.

Since 2010, Costa Rica has enjoyed strong and stable economic growth - 3.8% in 2017. Exports of bananas, coffee, sugar, and beef are the backbone of its commodity exports. Various industrial and processed agricultural products have broadened exports in recent years, as have high value-added goods, including medical devices. Costa Rica's impressive biodiversity also makes it a key destination for ecotourism.

Foreign investors remain attracted by the country's political stability and relatively high education levels, as well as the incentives offered in the free-trade zones; Costa Rica has attracted one of the highest levels of foreign direct investment per capita in Latin America. The US-Central American-Dominican Republic Free Trade Agreement (CAFTA-DR), which became effective for Costa Rica in 2009, helped increase foreign direct investment in key sectors of the economy, including insurance and telecommunication. However, poor infrastructure, high energy costs, a complex bureaucracy, weak investor protection, and uncertainty of contract enforcement impede greater investment.

Costa Rica’s economy also faces challenges due to a rising fiscal deficit, rising public debt, and relatively low levels of domestic revenue. Poverty has remained around 20-25% for nearly 20 years, and the government’s strong social safety net has eroded due to increased constraints on its expenditures. Costa Rica’s credit rating was downgraded from stable to negative in 2015 and again in 2017, upping pressure on lending rates - which could hurt small business, on the budget deficit - which could hurt infrastructure development, and on the rate of return on investment - which could soften foreign direct investment (FDI). Unlike the rest of Central America, Costa Rica is not highly dependent on remittances - which represented just 1 % of GDP in 2016, but instead relies on FDI - which accounted for 5.1% of GDP.

GDP (purchasing power parity)
$36.4 billion (2017 est.)
$34.71 billion (2016 est.)
$33.17 billion (2015 est.)

note: data are in 2017 dollars

$83.94 billion (2017 est.)
$81.27 billion (2016 est.)
$77.96 billion (2015 est.)

note: data are in 2017 dollars

GDP - real growth rate
4.9% (2017 est.)
4.7% (2016 est.)
4.8% (2015 est.)
3.3% (2017 est.)
4.2% (2016 est.)
3.6% (2015 est.)
GDP - per capita (PPP)
$5,900 (2017 est.)
$5,600 (2016 est.)
$5,500 (2015 est.)

note: data are in 2017 dollars

$16,900 (2017 est.)
$16,600 (2016 est.)
$16,100 (2015 est.)

note: data are in 2017 dollars

GDP - composition by sector
agriculture: 15.5% (2017 est.)
industry: 24.4% (2017 est.)
services: 60% (2017 est.)
agriculture: 5.5% (2017 est.)
industry: 20.6% (2017 est.)
services: 73.9% (2017 est.)
Population below poverty line
29.6% (2015 est.)
21.7% (2014 est.)
Household income or consumption by percentage share
lowest 10%: 1.8%
highest 10%: 47.1% (2014)
lowest 10%: 1.5%
highest 10%: 36.9% (2014 est.)
Inflation rate (consumer prices)
3.9% (2017 est.)
3.5% (2016 est.)
1.6% (2017 est.)
0% (2016 est.)
Labor force
3.046 million (2017 est.)
2.229 million (2017 est.)

note: official estimate; excludes Nicaraguans living in Costa Rica

Labor force - by occupation
agriculture: 31%
industry: 18%
services: 50% (2011 est.)
agriculture: 14%
industry: 22%
services: 64% (2006 est.)
Unemployment rate
6.4% (2017 est.)
6.2% (2016 est.)

note: underemployment was 46.5% in 2008

8.1% (2017 est.)
9.5% (2016 est.)
Distribution of family income - Gini index
47.1 (2014)
45.8 (2009)
48.5 (2014)
49.2 (2013)
Budget
revenues: 3.871 billion (2017 est.)
expenditures: 4.15 billion (2017 est.)
revenues: 8.357 billion (2017 est.)
expenditures: 11.92 billion (2017 est.)
Industries
food processing, chemicals, machinery and metal products, knit and woven apparel, petroleum refining and distribution, beverages, footwear, wood, electric wire harness manufacturing, mining
medical equipment, food processing, textiles and clothing, construction materials, fertilizer, plastic products
Industrial production growth rate
3.5% (2017 est.)
1.3% (2017 est.)
Agriculture - products
coffee, bananas, sugarcane, rice, corn, tobacco, cotton, sesame, soya, beans, beef, veal, pork, poultry, dairy products, shrimp, lobsters, peanuts
bananas, pineapples, coffee, melons, ornamental plants, sugar, corn, rice, beans, potatoes; beef, poultry, dairy; timber
Exports
$3.819 billion (2017 est.)
$3.772 billion (2016 est.)
$10.81 billion (2017 est.)
$10.15 billion (2016 est.)
Exports - commodities
coffee, beef, gold, sugar, peanuts, shrimp and lobster, tobacco, cigars, automobile wiring harnesses, textiles, apparel
bananas, pineapples, coffee, melons, ornamental plants, sugar; beef; seafood; electronic components, medical equipment
Exports - partners
US 44.2%, El Salvador 6.4%, Venezuela 5.5%, Costa Rica 5.5% (2017)
US 40.9%, Belgium 6.3%, Panama 5.6%, Netherlands 5.6%, Nicaragua 5.1%, Guatemala 5% (2017)
Imports
$6.613 billion (2017 est.)
$6.384 billion (2016 est.)
$15.15 billion (2017 est.)
$14.53 billion (2016 est.)
Imports - commodities
consumer goods, machinery and equipment, raw materials, petroleum products
raw materials, consumer goods, capital equipment, petroleum, construction materials
Imports - partners
US 20.8%, China 14.3%, Mexico 11.1%, Costa Rica 7.9%, Guatemala 7%, El Salvador 5.6% (2017)
US 38.1%, China 13.1%, Mexico 7.3% (2017)
Debt - external
$11.31 billion (31 December 2017 est.)
$10.87 billion (31 December 2016 est.)
$26.83 billion (31 December 2017 est.)
$24.3 billion (31 December 2016 est.)
Exchange rates
cordobas (NIO) per US dollar -
30.11 (2017 est.)
28.678 (2016 est.)
28.678 (2015 est.)
27.257 (2014 est.)
26.01 (2013 est.)
Costa Rican colones (CRC) per US dollar -
573.5 (2017 est.)
544.74 (2016 est.)
544.74 (2015 est.)
534.57 (2014 est.)
538.32 (2013 est.)
Fiscal year
calendar year
calendar year
Public debt
33.3% of GDP (2017 est.)
31.2% of GDP (2016 est.)

note: official data; data cover general government debt and include debt instruments issued (or owned) by Government entities other than the treasury; the data include treasury debt held by foreign entities, as well as intragovernmental debt; intragovernmental 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

48.9% of GDP (2017 est.)
44.9% of GDP (2016 est.)
Reserves of foreign exchange and gold
$2.758 billion (31 December 2017 est.)
$2.448 billion (31 December 2016 est.)
$7.15 billion (31 December 2017 est.)
$7.574 billion (31 December 2016 est.)
Current Account Balance
-$694 million (2017 est.)
-$989 million (2016 est.)
-$1.692 billion (2017 est.)
-$1.326 billion (2016 est.)
GDP (official exchange rate)
$13.81 billion (2017 est.)
$58.27 billion (2017 est.)
Market value of publicly traded shares
$1.568 billion (31 December 2016)
$1.209 billion (31 December 2015)
$995 million (31 December 2014)
$2.015 billion (31 December 2012 est.)
$1.443 billion (31 December 2011 est.)
$1.445 billion (31 December 2010 est.)
Central bank discount rate
3% (31 December 2010)
3.5% (31 December 2016 est.)
21.5% (31 December 2010)
Commercial bank prime lending rate
10.8% (31 December 2017 est.)
11.44% (31 December 2016 est.)
11.37% (31 December 2017 est.)
11.64% (31 December 2016 est.)
Stock of domestic credit
$6.461 billion (31 December 2017 est.)
$6.159 billion (31 December 2016 est.)
$41.04 billion (31 December 2017 est.)
$38.21 billion (31 December 2016 est.)
Stock of narrow money
$1.162 billion (31 December 2017 est.)
$1.043 billion (31 December 2016 est.)
$5.356 billion (31 December 2017 est.)
$5.63 billion (31 December 2016 est.)
Stock of broad money
$1.162 billion (31 December 2017 est.)
$1.043 billion (31 December 2016 est.)
$5.356 billion (31 December 2017 est.)
$5.63 billion (31 December 2016 est.)
Taxes and other revenues
28% (of GDP) (2017 est.)
14.3% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
-2% (of GDP) (2017 est.)
-6.1% (of GDP) (2017 est.)
Unemployment, youth ages 15-24
total: 8.5%
male: 6.4%
female: 12.9% (2014 est.)
total: 20.6%
male: 17.6%
female: 25.9% (2017 est.)
GDP - composition, by end use
household consumption: 69.9% (2017 est.)
government consumption: 15.3% (2017 est.)
investment in fixed capital: 28.1% (2017 est.)
investment in inventories: 1.7% (2017 est.)
exports of goods and services: 41.2% (2017 est.)
imports of goods and services: -55.4% (2017 est.)
household consumption: 64.2% (2017 est.)
government consumption: 17.3% (2017 est.)
investment in fixed capital: 17.1% (2017 est.)
investment in inventories: 1% (2017 est.)
exports of goods and services: 33.3% (2017 est.)
imports of goods and services: -32.9% (2017 est.)
Gross national saving
24% of GDP (2017 est.)
23.2% of GDP (2016 est.)
23.6% of GDP (2015 est.)
15.1% of GDP (2017 est.)
16.1% of GDP (2016 est.)
15% of GDP (2015 est.)

Source: CIA Factbook