Experts are warning that the rapid growth of public spending could have negative implications if conditions change in the economic environment.
After the Ministry of Finance raised the ceiling on the deficit for the nonfinancial public sector to 4.1% at the end of September 2014, there are now significant differences between income and expenses, resulting in a deficit of $2.07 billion.
In July, the public debt balance reached $14.57 billion, the highest in Central America in relation to GDP.
Elmundo.com.sv reports that "in the first half of the year, the ratio of public debt in El Salvador in relation to its Gross Domestic Product (GDP) was the highest in Central America, according to the Central American Monetary Council (CAMC)" .
Several Central American governments have resorted to issuing public debt as a way to continue living beyond their means.
An article by Rafael Delgado Elvir in Laprensa.hn objectively analyzes the tendency of governments to fall in debt when faced with economic slowdowns. Excess liquidity worldwide makes it very easy to issue bonds of any kind and for states to obtain direct loans.
At the IDB meeting which is being held in Managua, the countries will request to operate with a higher fiscal deficit in their public finances.
Prensa Libre published on its website: "The Nicaraguan Minister of Finance and Public Credit, Alberto Guevara, said that a regional joint position on different subjects will be accorded for presentation at the annual meeting of that organism’s Board of Governors.