Three equal horizontal bands of blue (top), white, and blue with the national coat of arms centered in the white band; the coat of arms features a triangle encircled by the words REPUBLICA DE NICARAGUA on the top and AMERICA CENTRAL on the bottom; the banner is based on the former blue-white-blue flag of the Federal Republic of Central America; the blue bands symbolize the Pacific Ocean and the Caribbean Sea, while the white band represents the land between the two bodies of water.

Nicaragua’s economy mainly relies on producing services, light manufacturing, and agriculture. Recently, Nicaragua has benefited from direct foreign investment, at 6.7 percent of Gross Domestic Product, GDP, with a bit less than 2022, and payments, which increased to 26.1 percent of GDP. The year before it had been 20.6 GDP. Nicaragua shows potential for development, but still remains Central America’s poorest country, and the 2nd poorest in the Americas. Though the openness to trade has increased, the country’s exports mainly consist of products with low complexity. To add on, Nicaragua is very vulnerable to natural hazards and external shocks. Nicaragua’s potential for growth is limited by things such as low quantities of human capital, a challenging business environment, poor roads, and quality of policy. The infrastructure gaps are one of the main causes of inflation because it makes getting places more expensive, which makes the cost of things more expensive too. Nicaragua has opportunities for growth by strengthening access to basic services, improving access to international markets, investing in human capital, and increasing value to services and manufacturing. In 2023, the GDP increased by 4.6 percent. The year before it had grown by 3.8 percent. The employment rate in Nicaragua reached 66.9 percent during the second half of the year, 2023. The economy could be affected by things like natural disasters, changes in food and oil prices, economic problems in important countries they trade with, and stricter financial rules. These issues could hurt trade and money coming in from other countries, causing prices to go up, more people to lose jobs, and more people living in poverty. It could also make it harder for the government to pay back its debts.