## IMF Executive Board Concludes First Review of the Extended Arrangement Under the Extended Fund Facility for Ecuador, Approves US$251.14 Million Disbursement

_IMF News, June 28, 2019_

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## Bibliographic details
- Published: June 28, 2019

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### Review outcome and disbursement
- The Executive Board completed the first review of Ecuador’s performance under the Extended Arrangement under the Extended Fund Facility (EFF).
- Completion of the review allows the authorities to draw the equivalent of SDR 180.65 million (about US$251.14 million).
- The 36-month EFF has a total access of SDR 3.035 billion (about US$4.2 billion), equivalent of 435 percent of Ecuador’s quota in the IMF.
- The EFF was approved by the IMF’s Executive Board on March 11, 2019 (Press Release 19/72).

### Program performance and macro outcomes
- The Board found that the authorities’ reform program supported by the Fund arrangement is yielding results.
- Specific outcomes noted:
  - The underlying fiscal position is improving.
  - International reserves are rising.
  - Borrowing costs are declining.
- The Board highlighted downside risks, including spillovers from neighboring countries, but emphasized that fiscal strengthening and structural reforms should help boost growth and create jobs.

### Fiscal reforms and public financial management
- The Ecuadorian government has demonstrated resolve to restore fiscal discipline by rationalizing public spending.
- Planned tax reform is described as instrumental in:
  - Raising revenues.
  - Making the tax system more efficient, simple and equitable.
- These reforms are expected to help put public debt on a sustainable path and strengthen Ecuador’s external competitiveness.
- Fiscal sustainability should be underpinned by reforms in public financial and debt management and improvements in fiscal transparency.
- The authorities are taking steps towards:
  - Strengthening budget formulation and execution.
  - Reducing discretion.
  - Strengthening oversight and controls.
  - Introducing robust fiscal rules.
  - Improving public debt management.

### Financial sector and central bank reform
- Fortifying the financial system is deemed paramount to preserving financial stability, improving crisis preparedness, and boosting the efficiency of financial intermediation.
- The institutional reform of the central bank is identified as key in:
  - Supporting the dollarization regime.
  - Boosting international reserves.

### Labor market, governance, and social protection
- Labor market reforms are essential for supporting job creation and boosting competitiveness and growth.
- Measures needed include:
  - Facilitating hiring.
  - Reducing rigidities and informality.
  - Increasing female labor force participation.
- Efforts to increase transparency and governance will help safeguard public resources and promote a business environment supportive of growth and job creation.
- Protecting the poor and the most vulnerable remains a key priority.
- The authorities are taking steps to upgrade the social registry and expand the coverage of social assistance.
- The Ecuadorian government “stands ready to step up efforts to ensure that the vulnerable remain protected.”

*Press Release No. 19/257, June 28, 2019 — International Monetary Fund*

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## References

- [Tao Zhang](https://www.imf.org/en/About/senior-officials/Bios/tao-zhang)
- [Ecuador and the IMF](http://www.imf.org/external/country/ECU/index.htm)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Press Release 19/72](https://www.imf.org/en/News/Articles/2019/03/11/ecuador-pr1972-imf-executive-board-approves-eff-for-ecuador)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2019/06/28/pr19257-ecuador-imf-exec-board-concludes-first-review-ext-arrange-under-eff-approves-disbursement_