The technical staff of International Monetary Fund (IMF) and Ecuador “they have reached an agreement” for a loan of about US$ 4,000 million over four years, the financial institution reported in a statement.
The agreement, reached within the framework of the IMF Expanded Facility (EFS)is still subject to approval by the Fund’s board of directors.
The government of Ecuadorian President Daniel Noboa requested weeks ago the opening of negotiations with the Fund, in the midst of a war against criminal gangs linked to drug trafficking that, as he acknowledged, “It costs money”.
To obtain resources, the Ecuadorian government will raise the Value Added Tax (VAT) from April, which will go from 12% to 15%, with the aim of raising about 1.3 billion dollars annually.
The Ecuadorian authoritieshave put together a solid plan and have begun taking important policy measures to address the fiscal and liquidity situation“, it states Varapat Chensavasdijaihead of mission of IMF in Ecuador, cited in the note.
“IMF staff welcome the authorities’ reform efforts to help strengthen fiscal sustainability, safeguard macroeconomic stability, and foster a stronger, more inclusive economy“, Add.
Source: Gestion
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