Statement by an IMF Staff Mission to El Salvador

Press Release No. 11/192
May 23, 2011

Mario Garza, mission chief of the International Monetary Fund (IMF) to El Salvador, issued the following statement today in San Salvador:

“An IMF mission visited San Salvador during May 16–20 to review recent developments and discuss with the authorities near-term prospects under the economic program supported by a Stand-By Arrangement with the Fund. The mission expects that real GDP will grow by about 2½ percent in 2011, in line with earlier projections, despite higher-than-projected world food and oil prices. The mission also confirmed that the program targets for the fiscal deficit and public debt for March 2011 were met, reflecting strong revenue performance, tax administration improvements, and strict expenditure control. Discussions with the authorities centered on the importance of adhering to their fiscal consolidation strategy including lowering the fiscal deficit to 3½ percent of GDP this year, targeting remaining subsidies to the most vulnerable, and developing a budget proposal for 2012 that places the public debt on a downward path. To reinforce the soundness of the banking system, the authorities will continue to improve supervision, strengthen liquidity buffers, and enhance banking resolution processes. An IMF mission will return to El Salvador in August to conduct the third review under the Stand-By Arrangement.”



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