Ecuador and IMF reach technical agreement on economic and reform program

IMFCommuniqué

This is an automated translation of the press release issued in Spanish

IMF staff and Ecuadorian authorities have reached a technical-level agreement on the first review of the arrangement under the country's Extended Fund Facility (EFF).

Following the talks, Mr. Varapat Chensavasdijai, IMF Mission Chief for Ecuador, issued the following statement:

“We are pleased to announce that IMF staff have reached a technical-level agreement with the Ecuadorian authorities on the first review of the 48-month EFS arrangement. This arrangement was approved by the IMF Executive Board on May 31, 2024, for a total amount of Special Drawing Rights (SDRs) of 3 billion (approximately US$4 billion and 430 percent of quota).

“Amid a complex macroeconomic environment and new pressures arising from the electricity crisis caused by a historic drought, our goal remains to support the authorities’ efforts to improve the living standards of all Ecuadorians, with an emphasis on protecting the most vulnerable, safeguarding macroeconomic stability, and promoting sustainable and inclusive growth.

“The authorities have made significant progress in implementing their economic reform plan supported by the EFS arrangement. All quantitative and indicative targets set for the end of August 2024 for the first review of the EFS arrangement have been met, and structural reforms show substantial progress. IMF staff welcome the decisive economic measures and reforms adopted by the authorities, which have strengthened the fiscal and external positions and facilitated access to financing. The authorities have also made important efforts to manage the cost of the electricity crisis within the existing fiscal framework. The policy measures and economic reforms implemented by the authorities are helping to safeguard dollarization, reinforce macroeconomic and financial stability, strengthen fiscal sustainability, and protect vulnerable groups, and are expected to foster a stronger and more inclusive economy.

“The IMF technical staff team thanks the Ecuadorian authorities for their excellent collaboration and constructive dialogue.”