Press Release No. 07/93

Press Release: Statement by an IMF Staff Mission in Nicaragua

May 11, 2007

The following statement was released today in Managua by an International Monetary Fund (IMF) mission:

"An IMF mission led by Vikram Haksar has been engaged in very productive talks with the Nicaraguan authorities about their policies to reduce poverty while maintaining macroeconomic stability. The mission met with the economic team as well as with Ministers of social sectors and representatives of the Caribe region, and had very constructive discussions concerning the development challenges facing the country. There was full agreement on the need to strengthen anti-poverty policies as well as on the importance of preserving the favorable macroeconomic performance.

"The discussions focused on the medium term economic program the authorities have formulated, for which they have requested IMF support through a new three year arrangement under the Poverty Reduction and Growth Facility. The authorities have prepared a substantive and wide ranging proposal whose main goal is to reduce poverty in a decisive way and move forward towards achieving the Millennium Development Goals. Moreover, they have stressed the importance of achieving these development objectives in the context of a stable macro framework, maintaining a sustainable public debt position and strengthening investor confidence.

"The authorities see an important need to increase social spending and investment in key sectors such as energy, water, education, and health. They also recognize the importance of further improving the efficiency of government expenditure through better targeting of pro-poor spending, strengthened systems of control and investment planning, and accounting transparently for all development assistance. In order to support their overall poverty reduction strategy, the authorities have developed a complimentary agenda that aims to strengthen, among others, the energy sector, the central bank, as well as to develop future options for social security reform.

"In the period ahead, the authorities and Fund staff will continue exchanging views on elements of the authorities' program."