Monday, 26 October 2020

Nicaragua Slashes Budget Due To Socio-Political Unrest

The Asamblea Nacional de Nicaragua (Nicaragua’s National Assembly) on Tuesday approved a drastic cut to the national budget because of the economic impact of months of anti-government unrest.

The legislators approved a 9.2% reduction of the Ley Anual de Presupuesto General de la República 2018 (2018 budget), projecting US$180 million less in spending to partly make up for a drop of US$220 million in government income.

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The vote was 75 in favor, 15 against and zero abstentions.

The cuts will affect government agencies such as the ministries of Education, Health and Public Works like in new roads.

It was the steepest cut seen in the past 11 years that President Daniel Ortega has been in power.

The minister for finance and public credit, Ivan Acosta, blamed the reduction on protesters accused of trying to stage a “coup” against Ortega’s government.

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Acosta said that before the protests, the economy had been expected to grow 4.3% this year. The government has now lowered that target to 1%.

The minister told the National Assembly that the fallout from the unrest had forced 8,700 small businesses to close.

Acosta added that the socio-political crisis in Nicaragua has left losses of US$525 million between April and July, as well as causing the loss of 119,567 jobs, of which 71,000 were workers affiliated to the Nicaraguan Institute of Social Security (INSS).

The tourism sector along has lost US$235 million, according to Acosta.

The private sector estimates that 200,000 people were left unemployed by the continuing crisis.

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Acosta said the budget cuts would not affect social spending, public investment or the level of government employment.

“This reform is tough,” he said. “Right now we are working on the premise that the country is returning in the direction of normality and stability.”

Fiscal and tax reform was needed to make up for the diminished growth, he added, warning that “those who must pay will be made to pay.”

That warning appeared to be aimed at Nicaragua’s business owners who have abandoned Ortega because of the deadly violence ordered against the protesters.

Article originally appeared on Today Nicaragua and is republished here with permission.

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Q24N
Q24N
Q24N is an aggregator of news for Latin America. Reports from Mexico to the tip of Chile and Caribbean are sourced for our readers to find all their Latin America news in one place.

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Article originally appeared on Today Nicaragua and is republished here with permission.

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