Caribbean & Central America - June 2012 (ISSN 1741-4458)

IMF visit: A delegation from the International Monetary Fund (IMF) paid a visit to Nicaragua between 2 and 11 May to discuss the 2012 Article IV. In its final mission statement, the IMF was positive on the management of the economy by the Frente Sandinista de Liberación Nacional (FSLN) government of President Daniel Ortega. It noted that, “helped by high export prices, large concessional and foreign direct investment flows, and broadly appropriate macroeconomic policies, the economy has averaged growth rates in excess of 4.5 percent during 2010-11”. As regards future priorities, the IMF underlined that “higher economic growth is essential to reduce poverty rates significantly over the medium-term. In this regard, measures to further strengthen institutions, reduce labour market informality, and enhance the effectiveness of public spending while reducing budget rigidities will be key…In addition, reforming the pension system is necessary for inter-generational fairness and long-term fiscal sustainability, and a more equitable tax system would also generate resources for needed infrastructure investment and social spending.”

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