Nicaragua continues to be the poorest country in Central America. For decades, political corruption and abuse of power have impeded foreign investment and stifled economic progress. Per capita income is less than $3,000 per year, the illiteracy rate is around 30%, half the population lives below the poverty line, and unemployment/underemployment affect as much as half the country. Nearly two thirds of jobs are in the informal economy.

Although Nicaragua has seen significant growth in the textile industry, which now makes up nearly two thirds of export earnings, agricultural exports such as coffee, beef, sugar, and cotton continue to be important. Since a third of the nation’s exports go to the U.S., Nicaragua has been hurt by the U.S. economy’s downturn. In addition, about 15% of the GDP comes from remittances from the U.S., which have also diminished during the current economic crisis. These factors have exacerbated the already grave economic situation.

Furthermore, the recent election of Daniel Ortega as president (2007) has had a negative impact on foreign aid and investment, both of which have been critically important to the Nicaraguan economy in the past. According to the U.S. State Department, "the investment climate has steadily worsened since Ortega took office. President Ortega's decision to support radical regimes such as Iran and Cuba, his harsh rhetoric against the United States and capitalism, and his use of government institutions to persecute political enemies and their businesses have had a negative effect on perceptions of country risk."

Nicaragua’s currency is the Cordoba. As of the summer of 2010, the Cordoba was trading at the rate of about twenty to the U.S. dollar (C$20: US$1). U.S. dollars are generally accepted as well, although travelers who pay in dollars will be given change in Cordobas.