The IMF Executive Board Concludes Third Review of the Extended Fund Facility Arrangement for Ecuador
IMF News, October 29, 2025
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- The IMF Executive Board Concludes Third Review of the Extended Fund Facility Arrangement for Ecuador
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- Published: October 29, 2025
Review outcome and disbursement
- The Executive Board completed the third review of the 48-month EFF arrangement for Ecuador.
- The review enables an immediate disbursement of SDR 438.4 million (about US$600 million).
- Total disbursements under the arrangement now equal SDR2 billion (about US$2.7 billion).
- The 48-month EFF arrangement was approved in May 2024 and augmented in July 2025, providing access equivalent to SDR 3.75 billion (about US$5 billion).
Program performance and structural reforms
- Program performance remains strong; all end-August 2025 quantitative performance criteria were met, many with significant margins.
- Authorities have made substantial progress on structural benchmarks, notably in fiscal, governance, and growth-enhancing reforms.
- Key policy actions taken by the authorities:
- Implemented high-quality revenue and expenditure reforms.
- Introduced targeted compensatory measures to protect vulnerable groups and expanded coverage of the social safety net for lower-income households, surpassing program targets.
- Advanced financial sector reforms: strengthening financial regulation and oversight, enhancing coordination between supervisory agencies, improving the resolution framework, gradual liberalization of the interest rate system, and development of domestic capital markets.
- Pursued structural reforms to attract private investment in sectors such as mining, hydrocarbons, and energy; diversify the economy; build resilience to natural disasters; fight illicit activities; and enhance institutional framework and governance.
- The authorities committed to implementing new structural benchmarks to further advance the reform agenda, expected to realize significant growth dividends over the medium term.
- The program catalyzes additional financial support from multilateral partners.
Macroeconomic outlook and key projections
- Real GDP is recovering much faster than projected at the second review, driven by strong domestic demand and record nonoil exports, alongside low inflation.
- The current account balance is projected to continue recording sizable surpluses, supporting a further increase in international reserves.
- The financial sector remains broadly stable, and credit growth is supporting economic activity.
- Projected indicators (Table 1: Selected Economic Indicators)
- Output
- Real GDP growth (%): 2024: -2.0; 2025: 3.2; 2026: 2.0
- Prices
- Inflation, average (%): 2024: 1.5; 2025: 1.1; 2026: 2.8
- Inflation, end of period (%): 2024: 0.5; 2025: 3.6; 2026: 1.7
- Public sector
- Revenue (% GDP): 2024: 36.8; 2025: 36.4; 2026: 36.7
- Expenditure (% GDP): 2024: 38.1; 2025: 37.6; 2026: (not listed for 2026 in table header — the table shows Expenditure (% GDP) row with entries 38.1, 37.6; follow-up value not provided)
- Overall fiscal balance (% GDP): 2024: -1.3; 2025: -1.2; 2026: 0.0
- Primary balance (% GDP): 2024: -0.2; 2025: -0.1; 2026: 1.2
- Non-oil primary balance (incl. fuel subsidies) (% GDP): 2024: -5.4; 2025: -4.1; 2026: -2.5
- Public sector debt (% GDP): 2024: 53.8; 2025: 53.0; 2026: 51.9
- Money and credit
- Broad money (% change) 1/ (M2): 2024: 4.8; 2025: 4.7; 2026: (not listed for 2026 in table header — the table shows Broad money row with entries 4.8, 4.7)
- Credit to the private sector (% change): 2024: 6.2; 2025: 8.4; 2026: 3.0
- Balance of payments
- Current account (% GDP): 2024: 5.7; 2025: 5.1; 2026: 4.0
- Foreign direct investment, net (% GDP): 2024: 0.3; 2025: 0.6; 2026: 0.9
- Gross international reserves (US$ billion): 2024: 6.9; 2025: 10.4; 2026: 13.1
- External debt (% GDP): 2024: 47.5; 2025: 50.7; 2026: 50.4
- Sources cited for the table: Central Bank of Ecuador, Ministry of Economy and Finance, National Statistical Institute (INEC), and IMF staff calculations.
- Note: 1/ M2.
Risks, outlook, and policy guidance
- Main vulnerabilities and risks:
- Acute global policy uncertainty and volatility in international financial markets.
- Domestic and external vulnerabilities that necessitate contingency planning.
- Policy guidance emphasized by IMF Executive Board and Acting Chair:
- Continue program ownership and steadfast implementation of the authorities’ reform program.
- Maintain and strengthen fiscal sustainability measures and liquidity buffers while protecting the most vulnerable.
- Continue fiscal consolidation and economic reforms to keep public debt on a firm downward trend.
- Strengthen social safety nets through targeted compensatory measures and expanded coverage for lower-income households.
- Advance financial-sector policy agenda to safeguard financial stability and develop domestic capital markets.
- Promote private investment in high-potential sectors to unlock growth potential and support job-rich growth.
Message from the Acting Chair (Mr. Nigel Clarke)
- Highlights from the Acting Chair’s statement:
- “All quantitative targets for the third EFF review have been met—many with significant margins—and the implementation of structural reforms is progressing well.”
- Real GDP recovery, low inflation, ongoing sizable current account surpluses, and increasing international reserves were noted as positive developments.
- “Solidifying these achievements will require continued program ownership and steadfast implementation of the authorities’ reform program. Contingency planning is also paramount given domestic and external vulnerabilities.”
- The policy agenda’s steadfast implementation has contributed to a substantial decline in sovereign debt spreads since their peak in April.
- The authorities remain committed to continuing to strengthen the fiscal position and maintaining public debt on a firm downward path.
Source: Press Release No. 25/353 — The IMF Executive Board Concludes Third Review of the Extended Fund Facility Arrangement for Ecuador (October 29, 2025).