Foreign Direct Investment Growth Forecast at 7.2%

November 25, 2005

MANAGUA – Foreign direct investment in Nicaragua this year is expected to reach $280 million, for a 7.2% increase from last year’s investment levels, according to investment promotion group ProNicaragua, as reported by the daily La Prensa.Last year’s foreign direct investment represented $261 million, up a whopping 29.6% from the year before, positioning Nicaragua second in Central America behind El Salvador.The biggest investment growth in Nicaragua has been registered in the areas of light manufacturing, tourism and construction of commercial centers and office parks.The main engine driving foreign direct investment is light manufacturing, or free-trade zones.Yet not all free-trade zone growth is in the area of textiles, despite receiving a boost in that area from the Central American Free-Trade Agreement with the United States (CAFTA).Free-trade zones are now starting to sprout in the areas such as call centers, as well as production of disposable medical products, billiards tables, and hydroponic products for vegetable cultivation. Preliminary data from the National Free-Trade Zone Commission shows the sector will generate between $780 to $800 million this year.

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