December 18, 2024
PRESS OFFICER: Meera Louis
Phone: +1 202 623-7100Email: MEDIA@IMF.org
End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.
Washington, DC: An International Monetary Fund (IMF) staff team led by Luis Cubeddu, Deputy Director of the Western Hemisphere Department, and Raphael Espinoza, Mission Chief for El Salvador, held discussions in San Salvador from December 5-14, 2024. Upon conclusion of these discussions, Mr. Cubeddu and Mr. Espinoza issued the following statement:
``The Salvadoran authorities and a staff team from the IMF have reached staff-level agreement on a 40-month extended arrangement under the Extended Fund Facility (EFF) for about US$ 1.4 billion (equivalent SDR 1,033.9 million, or 360 percent of quota) to address balance of payment needs and support the government’s economic reforms. The agreement is subject to approval by the IMF’s Executive Board, and contingent on the implementation of the agreed prior actions.
“The program is also expected to catalyze additional financial support from the World Bank, the Inter-American Development Bank, and other regional development banks (Central American Bank for Economic Integration, CABEI, Development Bank of Latin America and the Caribbean, CAF) for a combined overall financing package of over US$ 3.5 billion over the program period.
“The Salvadoran economy has steadily expanded since the pandemic, on the back of robust remittances and a remarkable pick-up in tourism, and amid an improved security situation, with climate shocks having only temporary negative effects. Meanwhile, the current account deficit has continued to narrow, and inflation has fallen further – supported also by lower global commodity prices. The fiscal situation continues to improve very gradually, and recent liability management operations have substantially lowered near-term financing needs, in the context of sharply lower sovereign spreads.
“Building on this progress, and recognizing El Salvador’s pending macroeconomic and structural challenges, the IMF-supported program aims to strengthen fiscal and external stability and help create the conditions for stronger and more inclusive growth.
“Key Elements of the program are:
“IMF staff thank the Salvadorean authorities for the excellent collaboration and candid dialogue over the past months in the development of their economic reform program aimed at continuing to improve the prosperity of El Salvador and all of its people. The IMF Board is expected to consider this program for approval by early-February once the agreed prior actions have been implemented.”
