{
  "title": "Nicaragua: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Nicaragua",
  "publication": "IMF Staff Country Reports, February 27, 2020",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2020/02/27/nicaragua-2019-article-iv-consultation-press-release-staff-report-and-statement-by-the-49129",
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  "summary": "This 2019 Article IV Consultation with Nicaragua highlights that social unrest and its aftermath eroded confidence and caused large capital and bank deposits outflows that resulted in a prolonged output contraction. Banks cut lending, which exacerbated the downturn.",
  "sections": [
    {
      "heading": "Key findings and recent developments",
      "content": "- Social unrest and its aftermath eroded confidence and caused large capital and bank deposits outflows that resulted in a prolonged output contraction.\n- Banks cut lending, which exacerbated the downturn.\n- Faced with sharply lower revenues and a severe tightening in available financing, including on account of sanctions, the government was forced to cut spending and adopt a procyclical tax package.\n- The sharp contraction in credit will continue to depress investment.\n- The tight fiscal and external financing situation will continue to drag down medium-term growth."
    },
    {
      "heading": "Near-term outlook and projections",
      "content": "- The economy is projected to continue to contract in the near term as it adjusts to weaker confidence and lower external financing.\n- Key risks:\n  - Further erosion in confidence and renewed deposit outflows.\n  - The imposition of additional sanctions by trading partners could also heighten economic stress."
    },
    {
      "heading": "Policy recommendations",
      "content": "- Maintain a conservative fiscal stance in 2020 as the key to maintain macroeconomic stability.\n- Curb expenditures on goods and services to allow increased spending on:\n  - Social programs,\n  - Social safety nets,\n  - Public investment.\n- These reallocations are intended to lead to more equitable and sustainable growth."
    },
    {
      "heading": "Subjects and keywords (as listed)",
      "content": "- Subject: Banking, Currencies, Economic sectors, Expenditure, External debt, Money, Public debt, Public sector\n- Keywords: Central America, central bank of Nicaragua, consumer price inflation, CR, crawling peg exchange regime, Currencies, headline inflation, IMF staff calculation, inflation development, ISCR, Public sector, staff appraisal, U.S. dollar\n\n---\n\n Content in this bundle\n\n- 1nicea2020001\n  - 1nicea2020001 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 1nicea2020001 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: February 27, 2020",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9781513532622.002",
    "Social unrest and its aftermath eroded confidence and caused large capital and bank deposits outflows that resulted in a prolonged output contraction.",
    "Banks cut lending, which exacerbated the downturn.",
    "Faced with sharply lower revenues and a severe tightening in available financing, including on account of sanctions, the government was forced to cut spending and adopt a procyclical tax package.",
    "The sharp contraction in credit will continue to depress investment.",
    "The tight fiscal and external financing situation will continue to drag down medium-term growth.",
    "The economy is projected to continue to contract in the near term as it adjusts to weaker confidence and lower external financing.",
    "Key risks:",
    "Maintain a conservative fiscal stance in 2020 as the key to maintain macroeconomic stability.",
    "Curb expenditures on goods and services to allow increased spending on:",
    "These reallocations are intended to lead to more equitable and sustainable growth.",
    "Subject: Banking, Currencies, Economic sectors, Expenditure, External debt, Money, Public debt, Public sector",
    "Keywords: Central America, central bank of Nicaragua, consumer price inflation, CR, crawling peg exchange regime, Currencies, headline inflation, IMF staff calculation, inflation development, ISCR, Public sector, staff appraisal, U.S. dollar",
    "**1nicea2020001**"
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