QUITO, October 28 (.) – An International Monetary Fund (IMF) mission is visiting Ecuador’s capital, Quito, to work with the Ministry of Economy and Finance and other institutions to analyze the country’s economic outlook and policies.
As the Ministry reported this Monday, the progress made by Ecuador in the implementation of its economic programs will also be discussed in the context of the Extended Service Fund (SAF, EFF) agreement with this organization.
The agreement, approved by the IMF’s Executive Board on May 31, aims to support Ecuador’s economic plan to strengthen its fiscal position and guarantee social protection and other priority areas.
Similarly, it aims to safeguard macroeconomic stability, with the ultimate goal of achieving inclusive economic growth and employment opportunities for the people, the ministry said in a note.
electric shock
The IMF warned last Friday that the drought suffered by Ecuador would not only affect the country’s economic outlook, but also its fiscal needs, which has had a 48-month credit program with Ecuador since May. .
“Ecuador is facing an extremely difficult power crisis accompanied by the worst drought in decades. The situation is still evolving, but we expect it to have an impact on both economic conditions and fiscal needs.” said Ana Corbacho, IMF Deputy Director for Latin America. And the Caribbean.
He therefore admitted that the growth forecast announced last week (0.3% this year and 1.2% next year) is not very realistic.
Ecuador is experiencing the “worst drought in 60 years,” as government official Daniel Novoa said, and also faces severe energy constraints with power outages of 10 to 14 hours a day for more than a month. I am doing it. at different times.
credit program
Last May, the IMF Executive Board granted Ecuador access to $4 billion in loans and approved a new 48-month credit program with $1 billion to be disbursed immediately.
According to the IMF, the program is part of the Extended Fund Facility (SAF), a program aimed at supporting Ecuador’s policies to stabilize the economy, protect dollarization, and lay the foundations for sustainable and inclusive growth. ).
Corbacho explained that the authorities are making “very strong progress in promoting the stabilization program” and have “taken very important fiscal measures, which are already bearing fruit by improving the fiscal situation.”
“We also find that liquidity fees and ultimately the country’s reserve position are stronger than we expected when we approved the program in May,” he said.
Rodrigo Valdes, IMF Director for Latin America and the Caribbean, congratulated the Ecuadorian authorities on achieving their goals, explaining that a “new review of the program” was on the way.
A few weeks ago, the IMF reviewed Ecuadorian authorities’ application for a new resilience credit, the MSR (RSF), a mechanism to provide affordable long-term financing to countries undertaking reforms to reduce risks to stability. reported that they were doing so.
