Press Release: Statement by IMF Mission to Nicaragua

July 10, 2007

Press Release No. 07/157

The following statement was released today by an International Monetary Fund (IMF) mission that visited Managua during June 25-July 6:

"An IMF mission led by Vikram Haksar visited Managua over the past two weeks to discuss the authorities' medium-term economic program for which they have requested IMF support through a new three year arrangement under the Poverty Reduction and Growth Facility (PRGF). The mission met with the authorities' economic team as well as with Ministers of social sectors, and the donor budget support group, and worked closely also with staff from the World Bank and Inter-American Development Bank.

"The discussions have been very productive. The mission reached understandings, subject to final agreement, on a draft letter of intent for a new PRGF-supported program, outlining the authorities' plans to reduce poverty while maintaining macroeconomic stability over the next three years.

"The mission supports the key elements of the authorities' macroeconomic framework for 2007-10. Proposed macroeconomic policies are consistent with entrenching stability and supporting confidence over the medium term, while creating additional fiscal space for moving forward towards achieving the Millennium Development Goals. The authorities' policy agenda prioritizes addressing the challenges in the energy sector, strengthening the transparency and governance of public sector institutions, as well as developing future options for social security reform, among other areas.

"In the coming weeks, the authorities and Fund staff will work to complete remaining technical work on the proposed economic program. The authorities are also seeking to complete the Annual Progress Report on Nicaragua's National Development Plan. Once the work on the final details has been concluded, the new PRGF-supported program will be presented to the IMF Executive Board."


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