Tuesday, Apr 23, 2024

Ecuador not looking for new agreement with IMF, will maintain ties

Ecuador not looking for new agreement with IMF, will maintain ties

Ecuador has fully financed its budget for next year and is not looking for a new credit agreement with the International Monetary Fund (IMF), the country's economy minister said on Friday, adding that the government will maintain close ties with the fund.
The IMF this week concluded the latest review of its $6.5 billion financing agreement with Ecuador, opening the way for a final disbursement of $700 million to the South American nation.

Although Ecuadorean authorities view the agreement as a success, Ecuador will not require funds from the IMF to finance its 2023 budget because it has resources that will come from other multilateral lenders and domestic debt issuances, Economy Minister Pablo Arosemena said.

"We have already financed next year's budget without counting on resources from a potential program with the IMF," Arosemena told reporters in Guayaquil. "The idea is to continue working with the (International Monetary) Fund."

The IMF agreement that ends this year established goals that included tax reform, audits of public companies such as Petroecuador, anti-corruption efforts and aid to the poor.

The deal also included a mechanism to remove fuel subsidies, which will amount to about $4 billion this year, for sectors that do not need state aid.

"Not everything with the IMF has to do with resources. It also has a lot to do with technical cooperation and most importantly endorsement," Arosemena said.

The Ecuadorian government will decide during the first quarter of 2023 if it needs a new credit agreement with the IMF.

Ecuadorean President Guillermo Lasso's spending plan for 2023 includes about $7.5 billion in financing and does not rule out issuing bonds in international markets.

Ecuador's government foresees a fiscal deficit of $2.630 billion by 2023, below the initially forecast $3.783 billion for 2022.

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