The International Monetary Fund (IMF) announced a technical agreement with El Salvador, which will allow a disbursement of approximately USD 140 million if approved by the Fund’s Executive Board. This agreement falls under the 40-month program through the Extended Fund Facility (EFF), which was approved in February 2025 for a total of approximately USD 1.4 billion.
The agreement is contingent upon the fulfillment of prior measures agreed upon by the Salvadoran Government and the decision of the Board. According to the IMF, El Salvador’s economy has exceeded projections for 2025, estimating a growth of Gross Domestic Product (GDP) of 4.5% in 2026, supported by private investments, consumption, remittances, tourism, and capital flows.
The head of the IMF mission for El Salvador highlighted the relationship between economic evolution, “improvements in security,” and increased investor confidence. The program also contributed to reducing poverty and improving efficiency in public services.
As part of the agreement, the Government must increase the primary surplus to 3.7% of GDP by 2027, starting from 2.9% this year. The target is aligned with the Fiscal Responsibility Law, which establishes a reduction of public debt to 80% of GDP by 2030.
The document includes measures for the pension system, including the recognition of obligations related to the expiration of the grace period for the payment of interest owed to private pension funds, as well as a parametric reform in the next year, in accordance with IMF recommendations.
The IMF also addressed the situation of Chivo, the e-wallet driven by the Government, indicating that state participation has decreased with operational control transferred to a private operator. It was specified that the accumulation of Bitcoin since the first review was due to private donations.
This IMF agreement, which comes in the context of recent reviews, reflects a long-term commitment to fiscal sustainability and transparency in public management in El Salvador.
Source: www.infobae.com
