The report notes that the liberalization of the trade, foreign exchange, and investment regimes, accompanied by progress in de-regulation and on-going public sector reforms, have resulted in a resumption of economic growth, the reduction of inflation and a decline in unemployment from 17.8 % in 1993 to 13.2 % in 1998, with new jobs being created in expanding sectors. Nicaragua's private sector and export competitiveness have been considered by the authorities as the key elements for economic growth. Foreign investment in Nicaragua has grown and diversified under the guarantees and incentives provided by the regulatory framework.
Despite damages equivalent to 50-65 % of Nicaragua's GDG from the hurricane Mitch's passage in 1998, projections for 1999 indicate an acceleration of real GDP growth to 6 %. However, GDP per capita remains lower than two decades ago, and progress in social welfare remains a challenging task, says the report. With an estimated US $ 446 GDP per capita in 1998, Nicaragua is still the second poorest nation in the hemisphere and approximately half the population lives in poverty. External debt remains high, despite several restructuring and forgiveness initiatives...