{
  "title": "IMF Executive Board Concludes Second and Third Reviews of the Extended Arrangement Under the Extended Fund Facility for Ecuador, Approves US$498.4 Million Disbursement",
  "publication": "IMF News, December 19, 2019",
  "sourceUrl": "https://www.imf.org/en/news/articles/2019/12/19/pr19478-ecuador-imf-executive-board-concludes-rev-extended-arrange-under-eff-approves-disburse",
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  "summary": "The Executive Board of the International Monetary Fund (IMF) today completed the combined second and third reviews of Ecuador’s performance under its economic program supported by the Extended Arrangement under the Extended Fund Facility (EFF).",
  "publishDate": "2019-12-19",
  "sections": [
    {
      "heading": "Reviews and Disbursement",
      "content": "- The Executive Board completed the combined second and third reviews of Ecuador’s performance under the economic program supported by the Extended Arrangement under the Extended Fund Facility (EFF).\n- Completion of both reviews allows the authorities to draw the equivalent of SDR 361.3 million (about US$498.4 million).\n- The 36-month Extended Arrangement has total access of SDR 3.035 billion (about US$4.2 billion), the equivalent of 435 percent of Ecuador’s quota in the IMF.\n- The Extended Arrangement was approved by the IMF’s Executive Board on March 11, 2019."
    },
    {
      "heading": "Fiscal policy, tax reform, and program recalibration",
      "content": "- The authorities recalibrated the economic program to include a more moderate fiscal consolidation and international reserves’ paths to respond to recent developments and to protect pro-poor growth and social spending.\n- The recently approved tax reform is expected to raise revenues and make the tax system “more growth-friendly, simple, and equitable.”\n- Commitment to fiscal prudence is emphasized as key to fiscal sustainability.\n\nPolicy recommendations and priorities:\n- Maintain fiscal prudence to secure fiscal sustainability.\n- Implement the approved tax reform to raise revenues and improve tax system design."
    },
    {
      "heading": "Social protection and social safety net",
      "content": "- Protecting the poor and increasing the social safety net are central priorities in the government’s program.\n- The authorities have introduced new measures to improve the adequacy and coverage of the social safety net.\n- Continued work is needed to upgrade the social registry to allow better targeting of social assistance spending.\n- To support authorities’ efforts, the program’s floor on social assistance will be raised.\n\nPolicy recommendations:\n- Upgrade the social registry to improve targeting of social assistance.\n- Increase the programmatic floor on social assistance to protect vulnerable populations."
    },
    {
      "heading": "Public financial management and debt management",
      "content": "- Public financial management reforms are described as paramount to secure fiscal sustainability in the longer term.\n- The revised reform of the Organic Budget Code is expected to fortify expenditure controls, limit budget discretion, introduce mechanisms to address arrears, and improve the framework for fiscal rules.\n- Continued work is needed in debt management to reduce borrowing costs and ensure a more efficient allocation of resources.\n\nPolicy recommendations:\n- Implement the revised Organic Budget Code to strengthen expenditure control and fiscal rules.\n- Advance debt management reforms to lower borrowing costs and improve resource allocation."
    },
    {
      "heading": "Central bank reform and reserves management",
      "content": "- Reform of the central bank aims to strengthen central bank autonomy, accountability, and governance.\n- Such reform is expected to support the dollarization regime, boost reserves, and ensure their prudent management.\n\nPolicy recommendation:\n- Finalize and implement central bank reforms to reinforce autonomy, governance, and reserves management."
    },
    {
      "heading": "Financial system stability and supervision",
      "content": "- The financial system continues to be stable; sustained reforms are needed to solidify the system.\n- Priorities include strengthening credit risk regulation and closing other regulatory gaps.\n- Upgrading banking and cooperatives’ supervision, building the macroprudential framework, and simplifying liquidity requirements will help reinforce the financial system in the longer term.\n\nPolicy recommendations:\n- Strengthen credit risk regulation and address regulatory gaps.\n- Upgrade supervision of banks and cooperatives.\n- Build a macroprudential framework and simplify liquidity requirements."
    },
    {
      "heading": "Competitiveness and structural reforms",
      "content": "- Efforts to raise competitiveness should continue to focus on:\n  - Improving transparency,\n  - Strengthening governance,\n  - Increasing efficiency of the public sector,\n  - Creating conditions in the labor market to facilitate hiring and female participation.\n\nPolicy recommendations:\n- Pursue transparency and governance reforms.\n- Improve public sector efficiency and labor market conditions to boost hiring and female participation."
    },
    {
      "heading": "Key statistics and dates",
      "content": "- Disbursement allowed: SDR 361.3 million (about US$498.4 million)\n- Extended Arrangement total access: SDR 3.035 billion (about US$4.2 billion)\n- Equivalent of access: 435 percent of Ecuador’s quota in the IMF\n- Arrangement duration: 36-month\n- Arrangement approval date: March 11, 2019\n- Press Release number: Press Release No. 19/478\n- Publication date on page: December 19, 2019\n\nInternational Monetary Fund\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Ecuador and the IMF\n- Press Releases\n- PRESS CENTER\n- Press Release 19/72\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2019/12/19/pr19478-ecuador-imf-executive-board-concludes-rev-extended-arrange-under-eff-approves-disburse"
    }
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    "Published: December 19, 2019",
    "The Executive Board completed the combined second and third reviews of Ecuador’s performance under the economic program supported by the Extended Arrangement under the Extended Fund Facility (EFF).",
    "Completion of both reviews allows the authorities to draw the equivalent of SDR 361.3 million (about US$498.4 million).",
    "The 36-month Extended Arrangement has total access of SDR 3.035 billion (about US$4.2 billion), the equivalent of 435 percent of Ecuador’s quota in the IMF.",
    "The Extended Arrangement was approved by the IMF’s Executive Board on March 11, 2019.",
    "The authorities recalibrated the economic program to include a more moderate fiscal consolidation and international reserves’ paths to respond to recent developments and to protect pro-poor growth and social spending.",
    "The recently approved tax reform is expected to raise revenues and make the tax system “more growth-friendly, simple, and equitable.”",
    "Commitment to fiscal prudence is emphasized as key to fiscal sustainability.",
    "Maintain fiscal prudence to secure fiscal sustainability.",
    "Implement the approved tax reform to raise revenues and improve tax system design.",
    "Protecting the poor and increasing the social safety net are central priorities in the government’s program.",
    "The authorities have introduced new measures to improve the adequacy and coverage of the social safety net.",
    "Continued work is needed to upgrade the social registry to allow better targeting of social assistance spending.",
    "To support authorities’ efforts, the program’s floor on social assistance will be raised.",
    "Upgrade the social registry to improve targeting of social assistance.",
    "Increase the programmatic floor on social assistance to protect vulnerable populations.",
    "Public financial management reforms are described as paramount to secure fiscal sustainability in the longer term.",
    "The revised reform of the Organic Budget Code is expected to fortify expenditure controls, limit budget discretion, introduce mechanisms to address arrears, and improve the framework for fiscal rules.",
    "Continued work is needed in debt management to reduce borrowing costs and ensure a more efficient allocation of resources.",
    "Implement the revised Organic Budget Code to strengthen expenditure control and fiscal rules.",
    "Advance debt management reforms to lower borrowing costs and improve resource allocation.",
    "Reform of the central bank aims to strengthen central bank autonomy, accountability, and governance.",
    "Such reform is expected to support the dollarization regime, boost reserves, and ensure their prudent management.",
    "Finalize and implement central bank reforms to reinforce autonomy, governance, and reserves management.",
    "The financial system continues to be stable; sustained reforms are needed to solidify the system.",
    "Priorities include strengthening credit risk regulation and closing other regulatory gaps.",
    "Upgrading banking and cooperatives’ supervision, building the macroprudential framework, and simplifying liquidity requirements will help reinforce the financial system in the longer term.",
    "Strengthen credit risk regulation and address regulatory gaps.",
    "Upgrade supervision of banks and cooperatives.",
    "Build a macroprudential framework and simplify liquidity requirements.",
    "Efforts to raise competitiveness should continue to focus on:",
    "Pursue transparency and governance reforms.",
    "Improve public sector efficiency and labor market conditions to boost hiring and female participation.",
    "Disbursement allowed: SDR 361.3 million (about US$498.4 million)",
    "Extended Arrangement total access: SDR 3.035 billion (about US$4.2 billion)",
    "Equivalent of access: 435 percent of Ecuador’s quota in the IMF",
    "Arrangement duration: 36-month",
    "Arrangement approval date: March 11, 2019",
    "Press Release number: Press Release No. 19/478",
    "Publication date on page: December 19, 2019",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[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)"
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