2024-02-02-IMF-尼加拉瓜_2023年第四条磋商新闻稿；和员工报告_113页_1mb

2023 Article IV Consultation with Nicaragua Summary

Core Content

The 2023 Article IV consultation with Nicaragua, conducted by the IMF, highlights the country's economic resilience in the face of multiple shocks over the past five years, including the 2018-19 socio-political crisis, the COVID-19 pandemic, and the 2020 hurricanes (Eta and Iota). The economy rebounded strongly in 2021 and continued to grow at a steady pace in 2022 and 2023, with real GDP growth of 4.0 percent in 2023. Inflation has declined, and the central government has maintained a small fiscal surplus and healthy government deposits.

Remittances have played a crucial role in supporting economic recovery, reaching about 28 percent of GDP in 2023, double their 2021 level. This, along with sustained foreign direct investment (FDI) and prudent macroeconomic policies, contributed to a rapid accumulation of gross international reserves (GIR), reaching $5 billion by end-October 2023, equivalent to about 6 months of imports (excluding maquila).

Main Points

Economic Outlook

• Growth: Real GDP is expected to grow at a slower rate in 2024 and the medium term, at about 3.5 percent, below historical averages (3.9 percent from 2000-2017). This is due to cautious investment recovery, limited new official financing, and reduced labor contribution from recent emigration.
• Inflation: CPI inflation declined from 12.2 percent in October 2022 to 6.0 percent in October 2023, with core inflation also decreasing to 5.7 percent.
• Current Account: The current account balance turned into a surplus of about 4 percent of GDP in 2023, supported by remittances and exports.
• Reserves: GIR increased significantly, reaching $5 billion by end-October 2023.

Risks

• Upside Risks: Higher-than-expected GDP growth could occur due to a sustained recovery in domestic demand and remittances.
• Downside Risks: A deterioration in the terms of trade, a more severe global downturn, natural disasters, and stricter international sanctions could negatively impact growth and economic stability.

Key Policy Recommendations

Fiscal Policy

• Strengthen fiscal sustainability and increase buffers and fiscal space for social and capital spending.
• Implement measures equivalent to 1.25–1.75 percent of GDP through higher revenue and lower current expenditure.
• Address structural imbalances in the social security system (pensions) and enhance fiscal transparency, including for state-owned enterprises (SOEs).

Monetary Policy

• Continue to support the exchange rate regime while safeguarding price stability.
• Maintain the rate of crawl for the exchange rate and adjust monetary and exchange rate policies as needed.

Financial Sector

• Address rapid consumer credit growth with macroprudential policies.
• Enhance financial stability through proactive provisioning, improved FX risk monitoring, and stronger crisis preparedness.
• Strengthen the supervisory perimeter and ensure sound lending practices.

Medium-Term Growth

• Continue investment in human capital and infrastructure.
• Implement policies to raise labor force participation and improve the business environment.
• Strengthen government institutions and frameworks in contract enforcement, property rights, and insolvency resolution.

Governance and Rule of Law

• Improve the effective application of the AML/CFT framework, governance, and anti-corruption frameworks.
• Ensure fair and impartial access to administrative and judicial proceedings.
• Publish asset declarations of politically exposed persons and enact whistleblower protection regulations.
• Strengthen the rule of law to protect property rights and support investment.

Key Information

• Fiscal Surplus: The consolidated public sector balance turned into a small surplus of 0.1 percent of GDP in 2022, with a deficit of -0.7 percent in 2023.
• Remittances: Remittances reached 28 percent of GDP in 2023, significantly boosting the current account balance.
• FDI: Sustained FDI inflows supported the economic recovery, particularly from reinvested earnings.
• Sanctions: Over 1,000 Nicaraguan officials and two state-owned mining entities are under U.S. sanctions, affecting certain aspects of governance and economic activities.
• Social Indicators: Poverty rate (2014) was 14.4 percent, adult literacy rate was 82.6 percent, and life expectancy at birth was 73.8 years in 2021.
• Income Inequality: The GINI Index was 46.2 in 2014, indicating moderate inequality.
• Data Quality: Continued improvement in data quality and institutional capacity in fiscal, monetary, financial, and statistical areas is recommended.

Conclusion

The IMF Executive Board endorsed the staff appraisal, recognizing Nicaragua's economic resilience and progress. However, it emphasized the need for continued prudent fiscal and monetary policies, enhanced financial sector stability, and improved governance and rule of law to sustain growth and development. The report also called for increased transparency and better implementation of anti-corruption measures to ensure long-term economic stability and social inclusion.