Following the approval of the Bitcoin Law in El Salvador by the members of the Legislative Assembly, which creates a legal framework that recognizes this digital currency as legal tender in the country, the IMF warns that financial and legal risks have arisen.
Within the framework of the fiscal adjustment being discussed in El Salvador in order to sign an agreement with the IMF, local authorities intend to apply VAT, ISR and other specific taxes to companies that sell their products and services online.
At the beginning of March, the Ministry of Finance informed that El Salvador is in talks with the International Monetary Fund (IMF) to obtain a loan of approximately $1.3 billion.
Strengthening the confidence of economic agents through a solution to the problem of public finances and moving forward with the process of vaccinating the population are key factors for the Costa Rican economy to recover quickly in the new year.
The spread of covid-19 and the restrictions imposed at the local and global levels severely affected most of Costa Rica's productive sectors, to the extent that the unemployment rate climbed to historical levels, several businesses were closed and economic activity fell sharply.
Although the Alvarado administration reversed the initial proposal to ask the IMF for $1.75 billion in financing and called for an inter-sectoral dialogue, Costa Rica is semi-paralyzed by the blockades that are taking place on various roads in the country.
Most of the reported increase in foreign investment flows to the country in the first quarter of the year was explained by investments in the electricity sector.
In the first quarter of 2019, figures from the Bank of Guatemala (Banguat) report a considerable increase in foreign direct investment (FDI) compared to the same period last year, going from $293 million to $340 million.
At the end of June in Guatemala, credit to the private sector registered a 7% year-on-year growth, which is explained by the upturn in mortgage and consumer loans.
Figures published by representatives of the Banco de Guatemala specify that at the end of the first semester of the year, the total credit to the private sector reached $26.571 million, amount that is 6.9% higher than that reported a year ago.
During its last visit to Guatemala, the IMF warned that if banking secrecy is not lifted in the country, compliance with "international transparency treaties" could be undermined.
After the last visit of the International Monetary Fund (IMF) to Guatemala, the international organization warned that reversing the decrease in tax collection involves strengthening the control of large taxpayers, improving the use of tax information to reduce non-compliance, reallocating resources to risk-based audits, and reconsidering the lifting of bank secrecy for tax auditing purposes.
Although Costa Rica's fiscal reform has already been approved, the IMF proposes raising some taxes as part of an "additional adjustment" to reduce debt and ease financial pressure in the short term.
"... “We are negatively surprised by the simplistic position of the International Monetary Fund that in the absence of money, taxes should be raised, we consider those words unacceptable, because it has been demonstrated in this country that a large part of the deficit is because of the inefficient use of public funds and an issue of state efficiency that does not allow people to become businessmen," said UCCAEP President Gonzalo Delgado."
Preserving macroeconomic and financial stability and restoring private sector confidence are part of the IMF's recommendations to the Nicaraguan government to mitigate the impact of the political and economic crisis.
A team from the International Monetary Fund (IMF) visited Nicaragua, and after evaluating the situation of the economy after more than six months of social and political crisis, forecasts a 4% contraction of the Gross Domestic Product by 2018.
"Despite temporarily slowing in 2018, the panamanian economy is poised for a rebound in the near term and will remain among the most dynamic in Latin America."
What the International Monetary Fund (IMF) said about the slowdown suffered by Panama's economy is not a surprise, considering what the indicators have been showing over the past few months. One of the best examples is the construction sector, which between January and August reported a reduction of 40% compared to the same period in 2017. Sales of new vehicles, a good thermometer of consumption of Panamanians, have not managed to rebound from last year, while foreign direct investment, which in previous years did not stop growing, reported a decline of 13% in the first six months.
Due to the crisis affecting Nicaragua and paralysis of construction in Panama between April and May, the IMF has reduced the expectation of economic growth for the Central American region from 4% to 3.3%.
The International Monetary Fund (IMF) cut growth forecasts for the Central American economy, due to the uncertainty caused by the situation in Nicaragua and its effect on the region's economic activity, and the impact of the construction strike in Panama, which has halted works on 260 projects nationwide for the last 30 days.
"We, at this moment in time, do not believe that these recommendations should be promoted because we are carrying out a series of readjustments that we believe are more relevant".
The Sanchez Ceren administration has ruled out addressing the recommendations made by a mission from the International Monetary Fund to correct the wrong direction of the Salvadoran economy.
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.