Nicaragua: IMF Mission Visits to Conduct Seventh and Last Review of the Extended Credit Facility

A mission from the International Monetary Fund (IMF) visited Managua during August 30–September 9 to discuss policies in the context of the seventh and last review of the Extended Credit Facility (ECF). At the end of the mission, Mr. Marcello Estevão, mission chief for Nicaragua made the following statement:

“The Nicaraguan economy has continued to grow strongly in the first semester of 2011, although heightened signs of weakness in the global economy are sources of risks going forward. For the year as a whole, IMF staff expects real GDP growth and inflation to be somewhat lower than in 2010. The trend towards lower inflation and growth is likely to continue in 2012 driven by a weaker external environment.

“Preliminary information suggests that all quantitative performance criteria for June-2011 agreed in the context of the ECF have been met with some margins. Looking forward, Fund staff underscored the importance of persevering with the process of fiscal consolidation and public debt reduction, while protecting investment and social expenditures. The mission also pointed out the importance of continuing with the implementation of the complementary agenda, especially strengthening the transparency of foreign cooperation flows and their uses; improving public financial management; strengthening the electricity sector to bring it to a sustainable financial situation; and continuing the discussions on the options to reform the social security system.

“Fund staff will work with the Nicaraguan authorities in the coming weeks to finalize the review, and the Executive Board discussion of the staff report is expected before end October.”