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Nicaragua is the largest country in Central America, covering 130,373 square kilometers. Its economy relies on producing light manufacturing, services, and agriculture. In recent years, Nicaragua has benefitted from foreign direct investment and remittances, which reached 8.3 percent and 20.6 percent of Gross Domestic Product (GDP), respectively, in 2022. 

The country has great potential for development, but it remains one of the region's poorest countries. While trade openness has increased, Nicaragua's exports consist mainly of low-complexity products. The country is highly vulnerable to external shocks and natural hazards. Its growth potential is limited by low levels of human capital, infrastructure gaps, and volatile business environment and quality of policy. However, the country has opportunities for growth by investing in human capital, improving access to basic services, support international trade, and adding value to manufacturing and services.

The GDP grew by 4.3 percent in 2023, driven by sectors such as electricity, mining, trade, construction, finance, transport, and communications. Consumption and investment also increased. In December 2023, the Monthly Index of Economic Activity (IMAE) showed a year-over-year increase of 5.5 percent. GDP growth is projected at 3.7 percent in 2024 and stabilize at 3.5 percent in the medium term.  

The employment rate reached 66.9 percent in the second half of 2023, close to pre-pandemic levels, due to sustained growth, lower inflation, and increased remittances. In December 2023, the employment rate for women significantly increased to 56.9 percent, but it remains substantially lower than the men's rate. Poverty, measured at US$3.65 per day based on the Purchasing Power Parities (2017 PPP), decreased from 13.1 percent in 2022 to 12.5 percent in 2023.

The macroeconomic outlook faces several risks, including natural disasters and geopolitical uncertainties that could drive up oil and food prices and economic downturns in major trading partners. El Niño has caused drought and extreme temperatures, reducing crop productivity and increasing food insecurity. This is impacting the Dry Corridor.

Last Updated: Apr 04, 2024


Nicaragua: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments
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Country Office Contacts

NICARAGUA +505 2270 0000
5to. piso Edificio Cobirsa, Km 6,5 carretera a Masaya, Managua
USA +1 202 473-1000
1818 H Street NW, Washington, DC 20433