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Nicaragua Economy

    Economy—overview: Prior to Hurricane Mitch in the fall of 1998, Nicaragua had been pursuing a number of impressive economic reforms and had begun to shed the legacy of a decade of civil war and economic mismanagement by posting strong annual growth numbers. The storm has put the reform effort on hold and has changed economic forecasts for the foreseeable future—Nicaragua, the poorest country in Central America was one of the hardest hit by the hurricane. Nicaragua sustained approximately $1 billion in damages and will probably see GDP growth slow by at least one percentage point in 1999. Hardest hit was the all-important agriculture sector, which is responsible for the majority of exports. As a result, the trade deficit is likely to balloon in 1999 to roughly $900 million. Significant aid and relief have helped to stabilize the country. In addition, the Paris Club and other creditors have offered substantial debt relief. Nevertheless, additional financing will be needed to restore the economy to its pre-Mitch condition.

    GDP: purchasing power parity—$11.6 billion (1998 est.)

    GDP—real growth rate: 4% (1998 est.)

    GDP—per capita: purchasing power parity—$2,500 (1998 est.)

    GDP—composition by sector:
    agriculture: 32%
    industry: 24%
    services: 44% (1997)

    Population below poverty line: 50.3% (1993 est.)

    Household income or consumption by percentage share:
    lowest 10%: 1.6%
    highest 10%: 39.8% (1993)

    Inflation rate (consumer prices): 16% (1998 est.)

    Labor force: 1.5 million

    Labor force—by occupation: services 54%, agriculture 31%, industry 15% (1995 est.)

    Unemployment rate: 14%; underemployment 36% (1997 est.)

    Budget:
    revenues: $389 million
    expenditures: $551 million, including capital expenditures of $NA (1996 est.)

    Industries: food processing, chemicals, metal products, textiles, clothing, petroleum refining and distribution, beverages, footwear

    Industrial production growth rate: 1.4% (1994 est.)

    Electricity—production: 1.665 billion kWh (1996)

    Electricity—production by source:
    fossil fuel: 48.95%
    hydro: 21.02%
    nuclear: 0%
    other: 30.03% (1996)

    Electricity—consumption: 1.665 billion kWh (1996)

    Electricity—exports: 0 kWh (1996)

    Electricity—imports: 0 kWh (1996)

    Agriculture—products: coffee, bananas, sugarcane, cotton, rice, corn, cassava (tapioca), citrus, beans; beef, veal, pork, poultry, dairy products

    Exports: $704 million (f.o.b., 1997)

    Exports—commodities: coffee, seafood, meat, sugar, gold, bananas

    Exports—partners: US, Central America, Germany, Canada

    Imports: $1.45 billion (c.i.f., 1997)

    Imports—commodities: consumer goods, machinery and equipment, petroleum products

    Imports—partners: Central America, US, Venezuela, Japan

    Debt—external: $6 billion (1996 est.)

    Economic aid—recipient: $839.9 million (1995)

    Currency: 1 gold cordoba (C$) = 100 centavos

    Exchange rates: gold cordobas (C$) per US$1—11.14 (December 1998), 10.58 (1998), 9.45 (1997), 8.44 (1996), 7.55 (1995), 6.72 (1994)

    Fiscal year: calendar year

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Revised 1-Mar-99
Copyright © 1999 Photius Coutsoukis (all rights reserved)