May 2, 2016Michael Sutherland-Shaw
The economic outlook for Nicaragua “remains favourable”, according to a new report from the International Monetary Fund (IMF).
Following a visit to the Central American nation last month (April 25-29), a team from the IMF concluded the economy continues to register high growth rates as well as sustainable macroeconomic policies.
“In 2015, real Gross Domestic Product (GDP) grew by 4.9% and the average of the last five years (5.2%) is one of the highest in the region,” said Gerardo Peraza with the IMF.
Following meetings with officials from the central bank, ministry of finance and other members of the cabinet, the IMF projects Nicaragua’s GDP will grow by 4.5% while annual inflation is projected at 6%.
Peraza added, “the consolidated public sector deficit is expected to widen to 2.4% of GDP owing primarily to the costs related to the presidential elections and an increase in capital expenditure.
“The external current account deficit is expected to widen, but the gross international reserves coverage will remain broadly stable (4.2 months of imports excluding the free trade zones),” he said.
According to the IMF, Nicaragua’s main challenge moving forward to maintain sustainable growth and economic stability starts and ends with a strong public financial system.
“Nicaragua needs to continue strengthening its public finances through creating fiscal buffers, as well as continuing to modernize the functioning of the financial system,” Peraza said.
In 2014, the Nicaraguan government deployed a comprehensive FreeBalance solution as the platform for the ambitious Gestión Administrativa Financiera del Sector Público (SIGAF-GRP) project.
The functional scope of the SIGAF-GRP includes robust functionality for budgeting, accounting, treasury, procurement, payroll, fixed assets and inventory.
FreeBalance helps governments around the world leverage robust Public Financial Management (PFM) technology to accelerate country growth. FreeBalance software solutions for public financial and human resource management increase transparency and accountability to improve governance and reduce corruption.
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