Press Release: IMF Concludes Staff Visit to Nicaragua

IMF News, April 29, 2016

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A staff team from the International Monetary Fund (IMF) led by Gerardo Peraza visited Managua during April 25–29, 2016.
Purpose: regular dialogue with the authorities to assess the performance of the Nicaraguan economy.
Meetings: officials from the central bank, the ministry of finance, other members of the economic cabinet, and other representatives of public and private sector entities.
IMF contact listed: Media Relations, E-mail: media@imf.org, Phone: 202-623-7100.

Real Gross Domestic Product (GDP) in 2015 grew by 4.9 percent.
Average growth of the last five years: 5.2 percent.
Inflation: 3.1 percent at end 2015.
Consolidated public sector registered a deficit of 2.2 percent of GDP.
Gross international reserves increased by more than US$200 million.
Reserves coverage expanded from 4 to 4.4 months of imports (excluding imports from the free trade zone) between 2014 and 2015.

Real GDP projected to grow by 4.5 percent in 2016.
Annual inflation projected at 6 percent in 2016.
Consolidated public sector deficit expected to widen to 2.4 percent of GDP, owing primarily to costs related to the presidential elections and an increase in capital expenditure.
External current account deficit expected to widen, but gross international reserves coverage projected to remain broadly stable (4.2 months of imports excluding the free trade zones).

Main challenge: maintain sustainable growth and economic stability amid greater uncertainty regarding global economic activity and potential changes in the availability of external financing.
Fiscal and financial sector priorities:
- Continue strengthening public finances by creating fiscal buffers.
- Reduce tax exonerations.
- Reduce the least targeted components of electricity subsidies.
- Continue modernizing the functioning of the financial system.
- Introduce macro-prudential tools to strengthen the resilience of the financial system.
- Examine factors that negatively impact the financial sustainability of the social security system.
Statistical priorities:
- Further strengthen the statistical framework as a crucial tool for effective macroeconomic policy.
- Continue efforts to strengthen methodologies for the compilation of national and external accounts, in particular the strengthening of the collection of base data.
- Continue strengthening fiscal statistics and the reports on public debt.

The IMF team expressed appreciation for the authorities' cooperation and candor.
The next IMF visit scheduled for the end of 2016 to evaluate the budget for 2017.

Press Release: IMF Concludes Staff Visit to Nicaragua — April 29, 2016