Editing Economy of Nicaragua (section)

== Economy ==
Unemployment was 7.2% in 2023.<ref>{{Cite web|url=https://knoema.com//atlas/Nicaragua/Unemployment-rate|title=Nicaragua Unemployment rate, 1980-2018 - knoema.com|website=Knoema}}</ref> Nicaragua suffers from persistent trade and budget deficits and a high debt-service burden, leaving it highly dependent on foreign assistance—which represented almost 25% of GDP in 2001.

One of the key engines of economic growth has been production for export. Although traditional products such as coffee, meat, and sugar continued to lead the list of Nicaraguan exports, the fastest growth is now in nontraditional exports: textile and apparel; gold; seafood; and new agricultural products such as peanuts, sesame, melons, and onions. In 2007, exports topped US$1 billion for the first time in Nicaraguan history.<ref>[http://news.monstersandcritics.com/americas/news/article_1293924.php/ANALYSIS_Close_scrutiny_after_President_Ortegas_first_100_days Monstersandcritics.com] {{webarchive|url=https://web.archive.org/web/20070929131431/http://news.monstersandcritics.com/americas/news/article_1293924.php/ANALYSIS_Close_scrutiny_after_President_Ortegas_first_100_days |date=29 September 2007 }}  Close scrutiny after President Ortega's first 100 days</ref>

Nicaragua is primarily an agricultural country, but construction, mining, fisheries, and general commerce also have been expanding during the last few years. Foreign private capital inflows topped $300 million in 1999 but, due to economic and political uncertainty, fell to less than $100 million in 2001. In the last 12 years, tourism has grown 394%,<ref name="tourism">[http://www.rcalvet.com/english/newsletter/investment01.php?id=85 Rcalvet.com] {{webarchive|url=https://web.archive.org/web/20070930041749/http://www.rcalvet.com/english/newsletter/investment01.php?id=85 |date=30 September 2007 }}  Government Gets Tough on Environmental Scofflaws</ref> the rapid growth has led it to become Nicaragua's second largest source of foreign capital. Less than three years ago, the nation's tourism budget was U.S. $400,000; today, it is over $2 million.<ref name="tourism"/> Nicaragua's economy has also produced a [[construction]] boom,<ref>[http://www.costaricapages.com/nicaragua/nicaragua_information.htm CostaRicaPages.com] {{webarchive|url=https://web.archive.org/web/20070407133358/http://www.costaricapages.com/nicaragua/nicaragua_information.htm |date=7 April 2007 }} Nicaragua Information</ref> the majority of which is in and around [[Managua]].

Nicaragua faces a number of challenges in stimulating rapid economic growth. An [[International Monetary Fund]] (IMF) program is currently being followed, with the aim of attracting investment, creating jobs, and reducing [[poverty]] by opening the economy to foreign trade. This process was boosted in late 2000 when Nicaragua reached the decision point under the [[Heavily Indebted Poor Countries]] (HIPC) debt relief initiative. However, HIPC benefits were delayed because Nicaragua subsequently fell "off track" from its IMF program. The country also has been grappling with a string of bank failures that began in August 2000. Moreover, Nicaragua continues to lose international reserves due to its growing fiscal deficits.

The country is still a recovering economy and it continues to implement further reforms, on which aid from the [[International Monetary Fund|IMF]] is conditional. In 2005, finance ministers of the leading eight industrialized nations ([[G8]]) agreed to forgive some of Nicaragua's foreign debt, as part of the [[Heavily Indebted Poor Countries|HIPC]] program. According to the World Bank Nicaragua's [[gross domestic product|GDP]] was around $4.9 US billion dollars. Recently, in March 2007, Poland and Nicaragua signed an agreement to write off $30.6 million which was borrowed by the Nicaraguan government in the 1980s.<ref>[http://english.people.com.cn/200703/31/eng20070331_362713.html english.people.com.cn] Poland forgives nearly 31 million dollars of debt owed by Nicaragua</ref>

The U.S. is the country's largest trading partner, providing 25% of Nicaragua's [[import]]s and receiving about 60% of its [[export]]s. About 25 wholly or partly owned [[Subsidiary|subsidiaries]] of U.S. companies operate in Nicaragua. The largest of those operations are in the energy, communications, manufacturing, fisheries, and shrimp farming sectors. Opportunities exist for expanded foreign investments in those sectors, as well as in tourism, mining, franchising, and the distribution of imported consumer, manufacturing, and agricultural goods. There also are [[copper]] mines in northeastern Nicaragua.

Gross Domestic Product (GDP) in [[purchasing power parity]] (PPP) in 2012 was estimated at US$20.04 billion, and GDP per capita in PPP at US$3,300, making Nicaragua the second poorest country in the Western Hemisphere.<ref name="CIA">{{Cite web|url=https://www.cia.gov/the-world-factbook/countries/nicaragua/|title=Central America :: Nicaragua – The World Factbook - Central Intelligence Agency|website=cia.gov|date=17 April 2024 }}</ref> The service sector is the largest component of GDP at 56.7%, followed by the industrial sector at 25.8%(2012). Agriculture represents 17.5% of GDP and it's the largest percentage in a Central American country. Nicaraguan labor force is estimated at 2.961 million of which 28% is occupied in agriculture, 19% in the industry sector and 53% in the service sector (2012).

===Agriculture and food production===
{| style="width: 26em; font-size: 85%; text-align: left;" class="infobox"
|- 
!align="center" bgcolor="lightblue" colspan="3"|Food and agriculture
|-
! style="background:#e9e9e9;" | '''Product'''
! style="background:#e9e9e9;" | World rank<sup>1</sup>
|-
| style="background:#f0f0f0;" |Coffee, green
| style="background:#f0f0f0;" align=right| 4
|-
|Beans, Dry
|align=right|17
|-
|Groundnuts in Shell
|align=right|30
|-
| style="background:#f0f0f0;" |Indigenous cattle meat
| style="background:#f0f0f0;" align=right|30
|-
|Plantains
| align=right|32
|-
|style="background:#f0f0f0;"|Sesame Seed
|style="background:#f0f0f0;" align=right|32
|-
|Sugar Cane
| align=right|32
|-
|style="background:#f0f0f0;"|Pineapples
|style="background:#f0f0f0;" align=right|33
|-
|Castor Beans
| align=right|37
|-
|style="background:#f0f0f0;"|Cocoa beans
|style="background:#f0f0f0;" align=right|41
|-
|Cassava
| align=right|48
|-
|style="background:#f0f0f0;"|Oranges
|style="background:#f0f0f0;" align=right|49
|-
|Soybeans
| align=right|50
|-
|colspan=3 style="background:#e9e9e9;" align=center|<small><sup>1</sup>Source: [[FAO]] (2005) Major Food and Agricultural Commodities and Producers<ref>http://www.fao.org/es/ess/top/topproduction.html?lang=en&country=157&year=2005</ref></small>
|-
|}

{{Main|Agriculture in Nicaragua}}
[[Coffee]] became Nicaragua's principal crop in the 1870s, a position it still held in 1992 despite the growing importance of other crops. [[Cotton]] gained importance in the late 1940s, and in 1992 was the second biggest export earner. In the early 20th century, Nicaraguan governments were reluctant to give concessions to the large United States banana companies, and [[banana]]s never attained the level of prominence in Nicaragua that they reached in Nicaragua's Central American neighbors; bananas were grown in the country, however, and were generally the third largest export earner in the post-World War II period. [[Beef]] and animal byproducts, the most important agricultural export for the three centuries before the coffee boom of the late 19th century, were still important commodities in 1992.

From the end of World War II to the early 1960s, the growth and [[Agricultural diversification|diversification]] of the [[agricultural sector]] drove the nation's [[economic expansion]]. From the early 1960s until the increased fighting in 1977 caused by the [[FSLN|Sandinista revolution]], agriculture remained a robust and significant part of the [[economy]], although its growth slowed somewhat in comparison with the previous postwar decades. Statistics for the next fifteen years, however, show stagnation and then a drop in agricultural production.

The agricultural sector declined precipitously in the 1980s. Until the late 1970s, Nicaragua's agricultural export system generated 40 percent of the country's GDP, 60 percent of national employment, and 80 percent of foreign exchange earnings. Throughout the 1980s, the Contras destroyed or disrupted coffee harvests as well as other key income-generating crops. Private industry stopped investing in agriculture because of uncertain returns. Land was taken out of production of export crops to expand plantings of basic grain. Many coffee plants succumbed to disease.

In 1989, the fifth successive year of decline, farm production declined by roughly 7 percent in comparison with the previous year. Production of basic grains fell as a result of [[Hurricane Joan]] in 1988 and a drought in 1989. By 1990 agricultural exports had declined to less than half the level of 1978. The only bright spot was the production of nontraditional export crops such as [[sesame]], [[tobacco]], and African palm oil.

===Services===
The service sector was estimated to account for 56.8% of the country's GDP, and employs 52% of the active population.<ref name="CIA"/> This section includes transportation, commerce, warehousing, restaurant and hotels, arts and entertainment, health, education, financial and banking services, telecommunications as well as public administration and defense.

[[Tourism in Nicaragua]] is one of the most important industries in the country. It is the second largest source of foreign exchange for the country and is predicted to become the first largest industry in 2007.<ref>[http://www.canal2tv.com/Noticias/Marzo%202007/turismo%20con%20gran%20empuje%20en%20Nicaragua.html Canal2tv.com] {{webarchive|url=https://web.archive.org/web/20070717184332/http://www.canal2tv.com/Noticias/Marzo%202007/turismo%20con%20gran%20empuje%20en%20Nicaragua.html |date=17 July 2007 }} Turismo en Nicaragua: aportes y desafios parte I</ref> The growth in tourism has positively affected the agricultural, commercial, finance, and construction industries as well.