Nicaragua's economy is focused primarily on the agricultural sector. However, the country is the least developed country in Central America and the second poorest in the Americas by nominal GDP. The country's economy and contracted, making it fall by 1.5% in 2009, due to decreased export demand in the US and Central American markets, lower commodity prices for key agricultural exports and low remittance growth. In recent years, particularly under the administration of Daniel Ortega, the Nicaraguan economy has also increased dramatically. In 2010, Nicaragua's economy grew at approximately 4.5% due to increased exports and tourism entries. Nicaragua's economy continues to post growth, with preliminary indicators showing the Nicaraguan economy growing an additional 5% in 2011. Consumer Price inflation have also curtailed since 2008, when Nicaragua's inflation rate hovered at 19.82%. In 2009 and 2010, the country posted lower inflation rates, 3.68% and 5.45%, respectively.

Remittances are a major source of income, they are equivalent to 15% of the country's GDP, which mostly comes from Nicaraguan immigrants who have emigrated outside to Costa Rica, the United States and other European Union member states. Approximately one million Nicaraguans contribute to the remittance sector of the economy.

Nicaragua (ⁱ/ˌnɪkəˈrɑːɡwə/ nik-ə-RAH-gwə), officially the Republic of Nicaragua (Spanish: República de Nicaragua [reˈpuβlika ðe nikaˈɾaɣwa] ( listen)), is the largest country in the Central American isthmus, bordered by Honduras to the north and Costa Rica to the south. The country is situated between 11 and 14 degrees north of the Equator in the Northern Hemisphere, which places it entirely within the tropics. The Pacific Ocean lies to the west, and the Caribbean Sea to the east. The country's physical geography divides it into three major zones: Pacific lowlands; wet, cooler central highlands; and the Caribbean lowlands. On the Pacific side of the country are the two largest fresh water lakes in Central America—Lake Managua and Lake Nicaragua. Surrounding these lakes and extending to their northwest along the rift valley of the Gulf of Fonseca are fertile lowland plains, with soil highly enriched by ash from nearby volcanoes of the central highlands. Nicaragua's abundance of biologically significant and unique ecosystems contribute to Mesoamerica's designation as a biodiversity hotspot.