IMF wants Honduras to tighten spending
A mission from the IMF asked the Honduran government of President Manuel Zelaya to control its spending on salaries for officials and to increase social investment.
Wednesday, August 20, 2008
The Government of Honduras "should restrict the granting of net loans from the public sector pension fund and try to control salaries, in order to protect its investment and social spending, and to strengthen banking supervision even more," said group demanded in a note.
The institution is once again emphasizing more efficient public spending and making cuts before a fiscal adjustment comes into force, in a form that is "draconian and with emergency measures".
If there are no reductions in state subsidies and wages no type of fiscal reform will allow the country to achieve sustainability.
Business leaders agree with a recommendation from the International Monetary Fund that the Government should rationalize government expenditure, especially subsidies.
The severity of the fiscal crisis in Honduras has forced a package that includes spending cuts in the 2012 budget of $61 million and an 11% reduction on salaries over $3,500.
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