Nicaragua’s emerging sectors and industries driving economic growth include light manufacturing, services, and agriculture. The country has a small, open economy that benefits from foreign direct investment and remittances.
Nicaragua is rich in natural resources, including gold, silver, copper, and timber, and has a well-established legal and regulatory framework for mining. The government has been offering incentives to foreign investors, such as tax breaks and duty-free access to necessary inputs and equipment. The government has also been working to improve the transparency and efficiency of the mining sector to attract foreign investment.
The country’s mining industry has the potential to contribute significantly to economic diversification and growth. The government has been urged to adopt ambitious institutional and economic reforms to place Nicaragua on a more dynamic path and offer better economic opportunities to the entire population, especially women and young people. The country’s economy is highly vulnerable to climatic shocks, and the impact of climate change has led to a decrease in agricultural productivity, exacerbating food insecurity and poverty.
The level of extreme poverty is expected to reach 44.1% in 2023, and the country is highly vulnerable to climatic shocks. The government has been advised to focus on pro-productivity and pro-poor policies to achieve economic diversification beyond subsistence agriculture and informal activities.
Nicaragua aims to reach 90% renewable electricity by 2027, relying on geothermal, solar, wind and hydroelectric. BPO/call center services and business process outsourcing is a growing industry given Nicaragua’s young, educated workforce and language capabilities
Light manufacturing, particularly in the food processing and medical equipment sectors, has development potential through export promotion zones. Infrastructure development around telecommunications, ports, airports, and roadways anticipated to support economic expansion. Mining production, focused on gold and silver exports, continues to increase year-over-year
While political challenges have hindered economic progress recently—Nicaragua still possesses fundamental strengths including a strategic location, natural resources, and low-cost skilled labor that could enable a return to growth with improved stability and policy reforms.
