In 2011, the estimated gross domestic product (GDP) of Nicaragua was $7.08 billion. The per capita GDP of Nicaragua was $1,202 in 2011. The country is the second best country in Central America for starting a business, and the sixty-second best in the world for starting a business.
The Nicaragua economy is primarily based on agriculture, but the country also generates revenue from textiles, beverages, wood, footwear, tobacco and gold. Sugar, lobster, shrimp, beef, coffee and peanuts are the main food and agriculture economic generators. Over thirty-one percent of its exported goods are shipped to the United States. Nicaragua other economic partners include: El Salvador, Honduras, Costa Rica, Canada, Guatemala and Mexico.
The Nicaraguan economy has increased due to an increase in exports and tourism. In 2011, the country experienced four percent economic growth due to exports and consumer spending at home.
What is a Remittance and How Does is Contribute to Nicaraguan Economy?
When Nicaraguans work in a foreign country and send money back to their home country, this is called a remittance and can be an economic boost for many countries. Fifteen percent of Nicaragua's gross domestic product is comprised of remittances. Most of Nicaragua's remittances originate from Nicaraguan citizens working in Costa Rica, the United States and the European Union and transferring money back to the country.
Remittances often exceed international aid and comprise the second largest influx of income to any country. The practice places more emphasis on the global economy rather than simply the local economies. Nicaraguans received $912 million in remittances primarily from the United States and Costa Rica in 2011.
Other Aid to Nicaraguan Economy
In an effort to reduce poverty in Nicaragua, the country assumed $4.5 billion in foreign debt in 2004 as a part of the Heavily Indebted Poor Countries Initiative. After receiving these funds, the country began to export textiles and apparel. In fact, these two goods accounted for 60 percent of Nicaragua's exports.
Nicaragua, in general, has been performing well in the export business after entering into the U.S. Central America Dominican Republic Free Trade Agreement (CAFTA-DR). Two-thirds of Nicaraguan exports or $2.6 billion were shipped to the United States. The United States only exported $924 million to Nicaragua.
In 2011, Nicaragua's leading exports were in coffee, cigars, sugar, gold, seafood, fresh fruit and vegetables. The economy in Nicaragua is most likely fueled by cigars, apparel and coffee.
The government also received $880.6 million primarily from energy and telecommunications in 2011. U.S. companies also contribute to Nicaragua's economy. One-hundred and twenty companies in energy, financial services, manufacturing, textiles and fisheries contribute daily to the economy in this country.
Nicaraguan Economy Showing Positive Growth Amid Tough Global Times
The Nicaraguan government is steadily growing despite some of the political leanings of the country. As the country begins to export more products, more people will look to Nicaragua as a place to retire and invest. Some Americans are considering Nicaragua because it is more affordable than some other areas to retire. The beaches in Nicaragua are beautiful, and there is much to see and do in the area making Nicaragua an ideal place to visit.