Nicaragua is the largest but most lightly inhabited of the Central American countries. The country borders on Costa Rica to the south and Honduras to the north. It is somewhat bigger than New York State. Nicaragua is hilly in the west, with rich and fertile valleys. Two big lakes, Nicaragua and Managua, are linked by the Tipitapa River. The Pacific shore is volcanic and very fertile. The marshy and boggy Caribbean coast is appropriately called the “Mosquito Coast.”

In 2006 population estimated at 5.603 million. 17% white, 69% mestizo, 5% amerindian, 9% black and. Rate of annual growth calculated at about 2.2 per cent, which is one of highest in Latin America. Population density was 42 people per square kilometre in 2006, which is lowest in Central America. Most of the population concentrated in lowlands. Population is 58.1 per cent urban, with urban growth rate is nearly twice that of rural areas.

Previously mixed economy undergoing widespread market-oriented structural modification, principally by means of privatization of state enterprises and downsizing of public sector. Restoration of economic strength and rebuilding after eight years of civil war are chief concerns. Manufacture is dominated by most important commodities, mostly agricultural, for export and household spending. Small manufacturing segment produces primarily for domestic and local markets. Debt and political insecurity hampering expansion and preventing return of overseas capital in early 1990s, in spite of dramatic development in reducing inflation since 1990. Economy is greatly dependent on foreign aid.