Press Release No. 11/82

Press Release: IMF Mission Visits Nicaragua to Conduct Sixth Review of the Extended Credit Facility

March 15, 2011

A mission from the International Monetary Fund (IMF) visited Managua during March 1–10 to discuss policies in the context of the sixth review of the Extended Credit Facility (ECF).¹ At the end of the mission, Mr. Gaston Gelos, mission chief for Nicaragua made the following statement today:

“The Nicaraguan economy has continued recovering from the impact of the global economic crisis of 2008-09, although the recent increase in the international prices of energy and agricultural products will present additional challenges. During 2010, GDP growth reached 4.5 percent, while inflation ended the year at 9 percent, partly due to the excess rains that affected the country. For 2011, Fund staff expects that GDP growth will decelerate somewhat and that the inflation rate will stay at about 9 percent”

“Preliminary information suggests that all quantitative performance criteria at end-2010 agreed in the context of the ECF have been met. Looking forward, Fund staff underscored the importance of continuing 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 reforms, especially strengthening the transparency on the uses of foreign cooperation flows; improving public financial management; maintaining a sustainable situation in the electric sector; and adopting a regulatory framework for the microfinance sector.

“Fund staff will continue to work with the Nicaraguan authorities in the coming weeks to finalize the review, with the aim to present it for IMF management and Executive Board approval by end-April.”

¹ The Extended Credit Facility (ECF) replaced the Poverty Reduction and Growth Facility (PRGF) in the upgrade of the IMF’s financial support to low-income countries announced in September, 2010.