Nicaragua

Economy - Overview From USA C.I.A. Statistics

Nicaragua, the poorest country in Central America, has widespread underemployment and poverty. GDP fell by almost 3% in 2009, due to decreased export demand in the US and Central American markets, lower commodity prices for key agricultural exports, and low remittance growth - remittances are equivalent to almost 15% of GDP. The US-Central America Free Trade Agreement (CAFTA) has been in effect since April 2006 and has expanded export opportunities for many agricultural and manufactured goods. Textiles and apparel account for nearly 60% of Nicaragua's exports, but increases in the minimum wage during the ORTEGA administration will likely erode its comparative advantage in this industry. Nicaragua relies on international economic assistance to meet internal- and external-debt financing obligations. Foreign donors have curtailed this funding, however, in response to November 2008 electoral fraud. In early 2004, Nicaragua secured some $4.5 billion in foreign debt reduction under the Heavily Indebted Poor Countries (HIPC) initiative, and in October 2007, the IMF approved a new poverty reduction and growth facility (PRGF) program

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