QUITO (XINHUA) – Ecuador reached an agreement with the International Monetary Fund (IMF) on Friday concerning a fund of USD6.5 billion to help ease the economic burden brought by the COVID-19 pandemic.
“We reached a technical agreement with the @FMInoticias to access USD6.5 billion for social protection and reactivation,” Ecuadoran President Lenin Moreno tweeted.
The IMF said in a statement that the Fund’s technical staff and Ecuadoran authorities had reached a 27-month agreement to support the country’s economic programme.
Managing Director Kristalina Georgieva tweeted that she proposed the fund to “support economic policies to help Ecuador’s people overcome the current crisis and build a better future”.
Early action is to be taken to improve public finances, including cutting crisis-related spending next year, implementing a fiscal reform package that consists of a moderation of current and capital spending, and comprehensive tax reform, according to the statement.
Due to the economic slowdown caused by the pandemic in Ecuador, the fiscal deficit and debt are expected to grow this year, so that “the initial financing that will be provided under the new agreement will help cushion the recession, and it will protect fiscal balances from new tensions,” said Head of the IMF mission in Ecuador Ceyda Oner.
In May, the IMF disbursed emergency support worth USD643 million to Ecuador.