We thank the staff for a concise and well-written report. On their behalf, we would like to express their appreciation to management and staff for the willingness to maintain a close engagement with the country.
In general terms, the Nicaraguan Authorities agree with staff’s appraisal and recommendations. Nevertheless, they would like to convey that they do not share staffs opinion regarding the country’s current political framework. In spite of the aforementioned and as a signal of their commitment to maintain transparency–in line with the Fund’s policy on this matter–our Nicaraguan authorities consent to the publication of the staff report.
Performance under the ECF arrangement has been satisfactory, reflecting the Government of Nicaragua’s commitment to the ECF-supported program, based on the conviction that it will help underpin macroeconomic stability and effectively support their social and infrastructure policies. All quantitative performance criteria through end-June were met with margins, except the ceiling on non-concessional external debt, which, for strictly technical reasons, was not observed. The authorities have moved forward regarding the implementation of the supplementary agenda, reaching important steps, particularly those related to reforms in the electricity sector, a new Central Bank Charter, the approval of a new procurement law in line with international practices, and steps taken to strengthen fiscal consolidation in 2010 and 2011. Based on the aforementioned, we request the completion of the fourth and fifth reviews, the waiver of nonobservance of performance criterion as well as a one-year extension of the ECF arrangement, the corresponding rephasing of the remaining access, and the approval of the SDR12.8 million disbursement.
Taking into account the international environment characterized by persistent uncertainties, our authorities believe that the extension of the ECF arrangement will play a crucial role in effectively supporting the authorities’ prudent macroeconomic management, which will help maintain confidence and anchor expectations during the next year, while allowing for further implementation of the reform agenda.