Many people from North America and Europe are taking the plunge and immigrating to various parts of Central America in an attempt to take advantage of the lower cost of living in many of these nations.Â One of the nations in Central America that Americans or Europeans may have an interest in immigrating to is Nicaragua.Â Before immigrating anywhere, however, it is beneficial to have an understanding of that nation's economic standing.
Overview of Nicaraguan Economy
The economic growth in Nicaragua for 2011 was much stronger than it was in the United States.Â The economy in Nicaragua grew at an annualized rate of 4.0% in 2011, although inflation is much higher than it is in the United States at over 7% on an annualized basis.
The Nicaraguan economy is largely based upon agricultural endeavors.Â The Central American Free Trade Agreement (CAFTA), signed in 2006 has provided some increased ability for Nicaragua to export more of its agricultural products abroad to the United States and other nations.Â The leading agricultural products from Nicaragua include animal products such as beef, shrimp and lobster, and crops of tobacco and sugar.Â The leading agricultural export from Nicaragua is still coffee, which is a major staple in many tropical locations.
In addition to the agricultural aspect of the economy in Nicaragua, there is also some industrial activity.Â Much of this industrial activity is related to the export of textiles and clothing.Â This should not be surprising because textile production is always one of the first areas in which developing nations industrialize.Â England and the United States are the first and foremost examples of this pattern.Â Nations such as Sri Lanka, Vietnam and China are later examples.
There are some gold deposits in Nicaragua, and the mining of these deposits contribute positively to the economy of the country.Â The major export markets for Nicaraguan goods are the United States, Venezuela, Canada, Mexico and other Central American nations.
What Does This Mean to Expats?
The economy in NicaraguaÂ is growing at a better rate than many other developed nations.Â For this reason, many expats may find it an attractive possibility for relocation.Â The economy of Nicaragua has been gradually growing since the end of the Marxist Sandinista regime in the early 1990s when many state-owned industries were privatized.
Because of the lower cost of living, many expats will find that they can live an affordable lifestyle.Â Much of the labor force is involved in service work.Â The labor market is somewhat soft with many of these workers underemployed.Â Therefore, many expatriates who want or need help around their homes may find that they are able to obtain help fairly easily.
It is not completely evident how much CAFTA will help the economy of Nicaragua, but it is likely that increased migration by expatriates will cause an increase in property valuation.Â It is unlikely that there is any direction for the Nicaraguan economy to go but up given its current status near the bottom of the Western Hemisphere.