The IMF has indicated political polarization, high crime and outward migration, rising unit labor costs and high logistics costs, barriers to entry and expansion of business, fiscal uncertainty, and limited human capital.
From a statement issued by the IMF:
The IMF staff team visited San Salvador during April 25—May 6 for the 2016 Article IV consultation and held fruitful discussions with the Salvadoran authorities, parliamentarians, business community, academics, and social partners.
The National Congress approved in a third and final debate a law that sets limits on the country's fiscal deficit and creates a new governing body for its macro fiscal policy.
From a statement issued by the National Congress of Honduras:
Tegucigalpa - The National Congress approved on a third and final debate, the whole of the Law on Transparency and Accountability, sent by the Executive and favorably dictated by a special commission, which includes topics such as putting a ceiling on current spending, public borrowing, staffing and establishing sanctions, among other issues.
Treasury data shows that in respect to income tax on legal persons, there was a 70% shortfall on potential revenue, representing 4.23% of GDP.
"... We are still finding fraud, smuggling, omissions, arrears and taxpayers taking advantage of weaknesses in our laws, they are still looking for ways to default on their obligations, therefore we are trying to improve controls and our tax laws," said Helio Fallas, Minister of Finance in Costa Rica.
An immediate fiscal adjustment is needed in order to avoid the risk of a possible closure of credit to the country in the international market, which would force an abrupt adjustment.
The warning from the head of the mission at the International Monetary Fund (IMF), Lorenzo Figliuoli, has its origin in the government's fiscal deficit, which this year will reach 5.9% of GDP, while increasing public sector debt reaches 60.4% of production.
The increasing number of foreign residents in the country and the good performance of the economy explain the 16% increase in transfers of money abroad in 2013 compared to the previous year.
Unlike other countries in Central America, in Panama there are more dollars sent out in the form of remittances than those coming in, a trend that has been consolidated in recent years, in parallel with the economic growth and the growing presence of foreigners coming to work in the country.
Despite the recommendation of the IMF's to make the exchange rate flexible, the government program forecasts that the Lempira will slip between 4.5% and 5% over the next four years.
Just as it did at the end of 2012, the IMF has again recommend that policymakers devalue the local currency, the Lempira, in order to minimize the negative effects of the growing fiscal deficit, which to date is equivalent to 68 % of GDP.
The Central Bank intends to adopt international standards for the system of performance indicators of the economy.
Projected for the period 2014-2021, the Programme for Modernization of MacroeconomicStatistics, as well as including new indicators, will have qualitative changes in databases and modernization of the presentation of results, including the renovation of urban and rural mapping and creation of a digital directory of buildings.
Having for years funded public spending with resources from the Venezuelan government, the country now plans to issue government bonds abroad.
The stable economic growth that Nicaragua has achieved in recent years has enabled the country to improve its financial position and has impacted positively on the country's risk perception on the part of international investors, giving it an important advantage in the event of a possible bond debt issue on the international market.
According to Moody's, credit profiles remain constrained by the rigidity in spending, low levels of government revenue and the deterioration of the cost of financing with debt.
From a press release issued by Moody's:
Honduras's credit profile is limited by rigidity in spending, low levels of government revenue and a deterioration of the cost of debt financing, according to Moody's Investors Service in its recent report on the country's credit analysis.
Management advisory firm that advises clients on issues in finance, strategy and governance, as well as on business development, raising capital.
Operates in El Salvador and Guatemala
Phone: (1) 2125450228
Represents the Company RTS INTERNATIONAL, Inc. of Kansas Cyty, TX, USA, for the territory of Guatemala and Central America. RTS finance exports through Factoring system.
Operates in Guatemala
Phone: (502) 2369 5408 - (502) 5709 2986