An International Monetary Fund (IMF) team, led by Ms. Patrizia Tumbarello, has reached a staff-level agreement with Ecuadorian authorities regarding the second review of the country's 48-month Extended Fund Facility (EFF) Arrangement. The discussions took place in Quito and Washington, DC from May 19 to June 10, 2025.
Ms. Tumbarello stated, "We are pleased to announce that IMF staff have reached a staff-level agreement with the Ecuadorian authorities on the second review under the EFF arrangement, subject to approval by the IMF Executive Board and confirmation of international partners’ financial commitments, with Board consideration expected in coming weeks." This agreement includes an augmentation proposal of SDR735 million (approximately US$1 billion) in financial assistance.
The original arrangement was approved by the Executive Board on May 31, 2024, for SDR3 billion (about US$4 billion). The revised program aims to attract further support from multilateral partners.
Ecuador's four-year EFF arrangement is intended to support its economic program. In 2024, Ecuador experienced a recession with a 2 percent contraction due to security and energy crises. Despite these challenges and an upcoming general election, authorities increased non-oil revenue and implemented reforms such as raising VAT rates and liberalizing gasoline prices. All quantitative performance criteria for end-December 2024 were met with wide margins.
"Ecuador faces additional challenges due to the recent global oil price shock and tighter external financing conditions," said Ms. Tumbarello. Despite these issues, Ecuador's government has committed to further policy reforms aimed at fiscal sustainability and growth in various sectors like taxation and energy.
"The authorities’ policy actions and reforms are helping to safeguard dollarization," she added. These efforts are also expected to enhance macroeconomic stability while protecting vulnerable groups.
The IMF team expressed gratitude for "the excellent collaboration throughout" their discussions with Ecuadorian officials.