International Trade in Nicaragua

News Related to International Trade in Nicaragua

• Costa Rica and Honduras pineapple exports exceed those from Nicaragua - May 14, 2013

  Nicaragua is far behind Costa Rica's and Honduras' pineapple export levels, partly because their main offer is the monte lirio variety and not the golden kind, which has a bigger demand.The 562,672 kg of pineapple that Nicaragua sold abroad last year left revenues of US $66,125, according to the Centre for.....

  Source: FreshPlaza

• Costa Rica; El Salvador; Guatemala; Honduras; Mexico; Nicaragua - Feb 28, 2013

  FTA among Costa Rica, El Salvador, Guatemala, Honduras, Mexico and Nicaragua ?? ratified by Costa Rica

  Source: ibfd.org

• Nicaragua; Russia - Feb 21, 2013

  FTA between Nicaragua and Russia ?? negotiations

  Source: ibfd.org

Business outline for Nicaragua

Economic Overview

Nicaragua has endured the strong effects of the international financial crisis and, most of all, the economic slowdown of the United States. in 2009, the reduction in demand, which has lead to a reduction in exports, investments and financial transfers, has plunged the economy into recession. However, the country resumed growth in 2010, a trend which should continue in 2011.

In order to face the crisis, the Nicaraguan authorities have taken measures to support domestic demand and protect the financial system from foreign impact. In the context of an agreement with the IMF, the country has also set up a program of structural reforms meant to stabilize public financing, to create a positive business environment and to build the basis of a long-term growth. 

In spite of the socio-economic progress accomplished, Nicaragua remains the second poorest country of Latin America and the Caribbean after Haiti. About 46% of its population lives beyond the poverty line, unemployment is extremely high and there is unequal distribution of wealth. Nicaragua ranks among the Heavily Indebted Poor Countries (HIPC), supported by the IMF and the Central Bank. The country's foreign debt was 88% of the GDP in 2009. Together with unmanaged inflation, this fact has forced the government to reduce public spending by 20%. 

FDI in Figures

After a strong upsurge, foreign direct investment into Nicaragua declined in 2009 and 2010, due to the financial crisis which has particularly affected the investing countries. It is estimated that during the next few years FDI should continue to decrease. 

Almost all sectors are open to FDI, with the exception of the water and sewage systems, power transmission and airports. Indeed, simplified procedures for the repatriation of capital gains are attractive to investors. However, the slowness, the lack of transparency in legal procedures and the lack of skilled workforce create a hindrance to the development of investments in the country. 

The energy sector attracts most of FDI. The USA, Mexico and Spain are the main investing countries. The business climate in Nicaragua appears relatively complicated. However, according to the global competitiveness index of the World Economic Forum, Nicaragua's position improves every year thanks to adopted reforms.

Foreign Trade Overview

Nicaragua is steadily working on opening its economy. The trade policy aims at obtaining a larger integration in the world's economy, a diversification of exports and an access to a wider market, by restricting state involvement and by reducing monopolies. The government has implemented the Central American Regulations on Customs Valuation and it has also reformed its Free Trade Zone system in order to promote international trade. 

Customs duties have been reduced and there are only a few trade barriers. The highest tariffs are imposed on certain items such as tobacco, alcohol and agricultural products such as corn and rice. Since 2006, Nicaragua's exports have been helped by a free-trade aggreement between the USA and Central America (CAFTA). After 3 years of negotiations, the EU and the Central American countries have just signed a free-trade agreement, especially concerning agricultural products. On the regional level, Nicaragua is a member of the ALBA, the Bolivarian Alliance for the Americas.

Nicaragua imports more than what it exports, this was confirmed in 2009 with a trade deficit balance, a trend that should continue during the next following years. Nicaragua's main trading partners are the countries of NAFTA (North American Free Trade Agreement), the CACM (Central American Common Market) and China.