IMF: Nicaragua. Seventh Review Under the Extended Credit Facility and Financing Assurances Review

A three-year PRGF (now ECF) arrangement for SDR 71.5 million (55 percent of
quota) was approved on October 5, 2007 and augmented by SDR 6.5 million (5 percent of quota) on  September 11, 2008. The second and third reviews under the ECF arrangement were completed in  November 2009. On November 19, 2010, the Board completed the fourth and fifth reviews of the  ECF and approved an extension of the arrangement through December 4, 2011. The extension entailed a re-phasing of remaining access under the ECF. The 6th review was completed in April 2011 on a lapse-of-time basis. The staff report on the 2010 Article IV consultation was discussed by the Executive Board on July 9, 2010.

Recent developments and outlook. The Nicaraguan economy continued to post robust growth in the first half of 2011, although economic activity and inflation are expected to cool down going forward owing to the weaker global outlook. The deficit in the external current account is projected to remain large and to be financed by resilient capital flows. Strong revenue performance and

expenditure restraint are projected to nearly eliminate the central government deficit in 2011, but the  operating results of public enterprises will be worse than expected.

Main review issues. All quantitative performance criteria for end-June 2011 were met and the  structural agenda is broadly on track. Discussions centered on the macroeconomic outlook and policies for 2011-2012, and on key structural issues, including restoring the electricity sector’s financial sustainability, reforming social security, and enhancing the effectiveness of poverty alleviation measures. Staff urged officials to keep current spending in check in the remainder of  2011.

IMF. Nicaragua. November 14, 2011. Series: Country Report No. 11/322

IMF: Nicaragua. Seventh Review Under the Extended Credit Facility and Financing Assurances Review