This statement provides additional information that has become available since the staff report was issued. The information does not alter the staff appraisal.
1. Growth and inflation. The monthly index of economic activity (IMAE) for October was 2.4 percent higher than a year earlier. This is in line with the modest recovery assumed in the program. The 12-month inflation rate in December was 6.5 percent, slightly higher than the program target of 6 percent. However, core inflation (excluding volatile items such as fuel) was only 3.7 percent.
2. Fiscal developments. Preliminary data through November 2003 indicate that the fiscal program remains on track.
3. Interest rates. Interest rates have continued to trend downward. At end-2003, average dollar deposit and lending rates were 5.7 percent and 12.1 percent, respectively.
4. International reserves. At end-2003, net international reserves were US$33 million higher than programmed, with gross reserves at US$504 (2.9 months of projected 2004 imports).
5. Privatization. The foreign company managing ENITEL (a state-owned telecommunications company) has decided not to match the offer received by the government in mid-December. Thus, the sale of ENITEL to the private sector (a floating completion point trigger) is now final. The authorities received the proceeds (US$49.6 million) on January 21.
6. Structural benchmarks. On January 16, 2004, new on-site technical and administrative procedures for banking supervision were approved (structural benchmark for end-2003).
Nicaragua: Fourth Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility Request for Waivers of Performance Criteria and Financing Assurances Review, Staff Report; Staff Statement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Nicaragua: Fourth Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility, Request for Waivers of Performance Criteria, and Financing Assurances Review—Staff Report; Staff Statement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Nicaragua