Commenting on the issue Jose Adan Aguirre, president of the Superior Council of Private Enterprise (COSEP), said, "The private sector shared with the IMF that the government needs to control spending."
The executive added that they shared the recommendations from the International Monetary Fund (IMF), in that the country must pass a reform to allows broadening the tax base and reducing tax exemptions.
According to Aguerri, private sector expectations are that negotiations for a new agreement between Nicaragua and the IMF will start no later than August or September, so the country will have an economic program in early 2013", reported Elnuevodiario.com.ni
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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.
A statement from the Presidency of Honduras reads:
Government approves draft measures to reduce public spending
The Ministry of Finance has announced that in the next few days actions will be taken by the Government to enact contingency measures in public spending,
From a press release from the Ministry of Economy and
Finance in Panama:
The Minister of Economy and Finance, Frank De Lima, announced in that in the next few days actions will taken by the Government to implement contingency measures in public spending in order to make budget adjustments needed to balance the state's finances and obtain in other ways the 400 million dollars that he had hoped to raise with the sale of the shares held by the government in electricity and telephone companies.
If there are no reductions in state subsidies and wages no type of fiscal reform will allow the country to achieve sustainability.
Since 2013 and via an Article IV report for El Salvador, the International Monetary Fund (IMF) has been warning the government about the need to take action to moderate wages in the public sector and correct poorly targeted subsidies, establishing strict controls over costs, which for the current year increased by $281 million.
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.
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.