IMF Pulling Out of Nicaragua, Says Job Done

The International Monetary Fund (IMF) announced on Wednesday that it would close its Nicaraguan office in August. In making the announcement, the group indicated that it believed its job in the Latin American country was done, and that Nicaragua was on the correct path to sustainable growth. 

The International Monetary Fund (IMF) announced on Wednesday that it would close its Nicaraguan office in August. In making the announcement, the group indicated that it believed its job in the Latin American country was done, and that Nicaragua was on the correct path to sustainable growth. 

“This decision reflects the success Nicaragua has had in maintaining macroeconomic stability and growth,” said the IMF’s Nicaraguan representative, Juan Zalduendo. Nicaragua concluded a debt reduction program designed by the IMF in 2011. While the IMF feels its job is done in Nicaragua, Zalduendo added that it would maintain six other offices in Latin America (located in Guatemala, Honduras, Haiti, Jamaica, Brazil, and Peru).

The government of Nicaragua was pleased that the International Monetary Fund had recognized its recent progress. During the IMF’s media conference to announce its office closure, the head of Nicaragua’s central bank, Ovidio Reyes, said that the closure was proof of Nicaragua’s “good macroeconomic results” achieved over recent years. 

In 1995, the IMF opened its Nicaragua office as part of its plan to supervise programs it instituted in the Central American nation aimed at stabilizing the poor country’s economy. The program relied on plans of reining in high foreign debt that flowed from decades of revolution and war. At its outset, the nation was one of the most indebted poor nations in the world. 

As a result, in 2005 the IMF included Nicaragua in its debt relief program called the Heavily Indebted Poor Countries Initiative. Nicaragua successfully exited the program in 2011, having substantially reduced its reliance on foreign lenders, achieving greater economic growth and self-sufficiency, and significantly climbing out of what was once a spiraling whirlpool of debt.

In the past ten years, Nicaragua has managed to achieve growth rates of over four percent per year. The only exception occurred in 2009 as a result of the global financial crisis, and Nicaragua managed to get back on its growth trend the very next year; far faster than most of the world’s economies.

In 2015, Nicaragua announced that it had managed to reduce the portion of its population living beneath the poverty line from 45 percent at the beginning of 2009 to about 30 percent by 2014. That number has probably continued to grow smaller since 2014, but it has not yet been recalculated. The IMF hailed this accomplishment in a report in February, and it may have been one of the last indicators prompting the organization’s decision to leave the Latin American country later this year.