IMF approves Nicaragua’s seventh review

Nov. 16, 2011 - PRLog -- The Executive Board of the International Monetary Fund (IMF) recently completed the seventh and final review of Nicaragua’s economic performance under its Extended Credit Facility (ECF) arrangement. According to the IMF, all quantitative performance criteria for June 2011 were met, and the structural agenda has developed as planned. Completion of the review allows for the final disbursement of US$8.74 million, totalizing disbursements to date of US$114.1 million.

Following the Executive Board discussion on Nicaragua, Mr. Min Zhu, Deputy Managing
Director and Acting Chair of the IMF Executive Board stated that “important steps have been taken to advance the structural reform agenda, including the approval of a law regulating the micro-finance sector and the introduction of norms requiring greater disclosure by financial cooperatives and trust funds. Significant progress has been made in managing and reporting aid flows, and continued improvements in this area would help foster confidence, facilitate macroeconomic management, and mobilize donor support”.

Additionally, Mr. Zhu confirmed that the Nicaraguan economy grew strongly in the first half of 2011 despite deteriorating global conditions. Nicaragua’s growth continues to be broad based on foreign investment inflows and official borrowing, which are expected to finance the external current account deficit and contribute to reserve accumulation in 2011.

“The Nicaraguan banking system remains generally sound. Banks are well capitalized, profitability continues to improve, and liquidity buffers remain ample. The authorities intend to step up their efforts to improve coordination and information exchanges with other regional supervisors and to monitor volatile aid-related deposits”, he added.

He also mentioned that efforts have been intensified to create space for investment and well-targeted assistance to the poor and that key structural reforms in the fiscal area include enhancing tax administration, broadening the tax base, and reforming the pension system and the civil service.

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PRONicaragua is the Nicaraguan Investment Promotion Agency, established in 2002. It is a non-profit, public-private institution whose mission is to generate economic growth and job creation in Nicaragua by attracting high-quality foreign direct investment. The agency provides complimentary support services to qualified investors seeking investment opportunities in our country.