## Press Release: IMF Concludes Staff Visit to Nicaragua

_IMF News, April 29, 2016_

## Source details

**Canonical URL:** [Press Release: IMF Concludes Staff Visit to Nicaragua](https://www.imf.org/en/news/articles/2015/09/14/01/49/pr16191)

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## Bibliographic details
- Published: April 29, 2016

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### Visit overview
- 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.

### Recent economic performance (2015 and prior)
- 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.

### Economic outlook and projections (2016)
- 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 challenges and policy recommendations
- 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.

### Process and next steps
- 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*

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## References

- [Nicaragua and the IMF](http://www.imf.org/external/country/NIC/index.htm)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr16191_