Economic performance in Nicaragua has been better than envisaged; nonetheless, vulnerabilities remain and will be compounded by electoral uncertainties. The decision to use part of the strong revenue performance to lower the fiscal deficit is appropriate. Exchange-rate and monetary policy remain broadly adequate. Fiscal adjustment should set the stage for a strong program of fiscal consolidation following the elections. Continued vigilance in the financial sector will be critical. Improvement in reporting and monitoring of foreign aid flows and transparency is necessary.
International Monetary Fund. External Relations Dept.
This paper highlights that the distribution of income and wealth in developing countries has become a matter of great concern to all those interested in development. The paper highlights that in Latin America, the poorest half of the population receives about the same share of income as the top 1 percent and the lowest 70–75 percent of the population the same share as the top 5 percent. It is clear that the distribution of income and wealth will have substantial implications for the pattern of consumption and production in developing countries.