Despite global economic turbulence, Nicaragua has stood out for maintaining growth levels above the average for Latin America and the Caribbean. Disciplined macroeconomic policies, combined with a steady expansion of exports and foreign direct investment, helped Nicaragua to weather the global economic crisis of 2008-09, rising food and oil prices. By 2011, growth had accelerated to reach a record 6.2 percent, later declining to 5.1 and 4.6 percent for 2012 and 2013, respectively.
While country’s Gross Domestic Product (GDP) shrank to a 3.9 percent in 2015, the lowest rate in the last five years, GDP forecast for 2016 is 4.2 percent. Foreign direct investment and trade also show an improved outlook.
Nicaragua’s macroeconomic stability has allowed the country’s decision makers to shift from crisis control mode to longer-term, pioneering strategies to fight poverty, particularly in remote rural communities. Massive debt relief by the International Development Association (IDA), the World Bank’s fund for the poorest countries, has helped make this shift possible.
According to the 2014 Standard of Living Survey by the National Development Information Institute, between 2009 and 2014 general poverty in Nicaragua dropped 13 percent, from 42.5 percent to 29.6 percent; while in the same period extreme poverty dropped 6 percent, from 14.6 to 8.3 percent.
Despite this progress, Nicaragua is still one of Latin America’s least developed countries, where access to basic services is still a daily challenge. Poverty, although declining steadily in recent years, remains high.
To better reach the country’s vulnerable families, IDA projects leverage local initiatives that stretch limited resources further and deliver sustainable results. Examples of these include the improvement of “casas maternas”, health facilities which are supported by local NGOs and volunteers to provide pre- and post-natal health care to expecting mothers; and the coordination of community participation associations known as “módulos comunitarios de adoquines” to build rural roads using local labor.
To this end, Nicaragua’s National Plan for Human Development (PNDH) has being updated through 2016. Its overall objective is to reduce inequality by increasing the fight against poverty, reducing spending, and increasing investment in social sectors and rural infrastructure.
Last Updated: Mar 29, 2016