Nicaragua cuts its budget due to the crisis and affects public investment

Nicaragua cuts its budget due to the crisis and affects public investmentManagua, Aug 14 (EFE) .- Nicaragua today cut its spending budget for this year by 186.3 million dollars, 1.3 percent of its GDP, in the midst of its bloodiest sociopolitical crisis since the 1980s. Last century.

The amendment, sent urgently by the country’s president, Daniel Ortega, affects, mainly, public investment programs, health and education portfolios, and transfers to municipalities, according to the project approved by the pro-government deputies and its allies.

The budget cut was due to a lower collection of tax revenues of up to 9.2 percent, and a reduction in donations and disbursements of external loans, explained the Minister of Finance and Public Credit, Iván Acosta, who made a presentation before the plenary before its approval.

The official said that the protests against the Ortega government, initiated on April 18 by failed social security reforms that have left hundreds dead, have also caused serious damage to the economy, especially in tourism sectors, trade and transport.

The tourist activity will have a reduction of income of 231 million dollars this year, he said.

Meanwhile, up to now they have recorded the closure of 8,708 companies, most of them micro and small, which have left 71,012 workers in the formal sector unemployed and 119,567 in total.

Likewise, it reported losses of 525 million dollars in the transport sector, including infrastructure.

Despite the budget cut, the finance minister said that the 130,000 jobs in the public sector that were included in the initial budget are safe.

The general expenditure budget for 2018 went from 2,745.8 million dollars to 2,559.5 million dollars, 186.3 million dollars less and only 0.9 percent more than in 2017.

Meanwhile, the general budget of income was reduced by 235.2 million dollars, 9.2 percent less than the initial budget approved and 0.7 percent lower than in 2017.

The new budget deficit is 48.8 million dollars, the official explained.

Some of the most affected sectors are the Public Investment Program, with 129.5 million dollars less; the health worker, who will lose 26.6 million dollars; the transfer to the municipalities, with 23.6 million dollars; and education, whose income will be reduced by 19.7 million.

To “partly compensate for the drop in revenue collection and employment protection policy,” and to support the liquidity shortfall facing the Nicaraguan Social Security Institute (INSS), the Parliament authorized the Treasury to seek greater external sources of funds. financing and issuing bonds up to an amount of 280 million dollars.

During the debate, the deputy and president of the Conservative Party, Alfredo César, considered this cut “insufficient” and did not rule out a new adjustment in the last quarter of this year.

The Sandinista Wálmaro Gutiérrez, president of the Foreign Affairs Committee, accepted that “it is a hard and perhaps insufficient budget reform”, but that they have to go “step by step”.

He explained that the economic team of the Government, to which he belongs, elaborated that reform trusting that Nicaragua will be returning “to the channels of normality” after the protests against Ortega, which he described as a “failed coup”.

Likewise, he did not rule out that the Parliament approves a reform to the Tax Law to eliminate exonerations to the big companies and “to pay the ones that have to pay”.

Opposition liberal deputy Azucena Castillo criticized the government for its “lack of ability” to respond to student protests and prefer the disproportionate use of force.

Castillo warned that Ortega, and Nicaragua in general, “is going through a breach of international discredit, both financially and in terms of human rights,” which will prevent it from rapidly recovering its growth.

Ortega acknowledged yesterday the “enormous damage to the economy” by the protests started on April 18, which forced him to present the cut.

Nicaragua is mired in a sociopolitical crisis that has left, according to different human rights organizations, between 317 and 448 deaths, but the government figures the victims in 198, which makes it the bloodiest since the 80s.

The protests against Ortega were initiated by failed social security reforms and became a demand for the resignation of the president, after eleven years in power, with accusations of abuse and corruption against him.

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