The International Monetary Fund (IMF) Executive Board has concluded El Salvador's 2025 Article IV consultation and completed the first review of the Extended Fund Facility (EFF) arrangement. This completion allows for an immediate disbursement of SDR 86.16 million, approximately US$118 million, increasing total disbursements under this arrangement to SDR 172.32 million, or about US$231 million.
El Salvador's EFF arrangement spans 40 months and was approved on February 26, 2025, with a total access of SDR 1,033.92 million (around US$1.4 billion). The program aims to strengthen public finances, rebuild external and financial buffers, and enhance governance and transparency frameworks to foster stronger growth.
The economy is expanding as macroeconomic imbalances are being addressed. Fiscal and international reserve targets have been met, and progress continues in governance, transparency, and financial resilience reforms. Notable actions include enacting a new Fiscal Sustainability Law, issuing a presidential decree limiting exceptions to the Procurement Law, publishing financial information on major state-owned enterprises, and making public contract information more accessible.
Deputy Managing Director Nigel Clarke stated: "El Salvador’s economic program had an auspicious start...Fiscal consolidation remains on track...In light of rising external risks, agile policy making and contingency planning remain essential."
Executive Directors praised the authorities for strong ownership and satisfactory performance under the program but noted downside risks from global trade tensions and tighter immigration policies. They emphasized sustaining reform momentum to safeguard stability and address structural challenges.
Directors also highlighted the need for fiscal consolidation by rationalizing the wage bill and containing expenditures while maintaining social spending. They supported efforts to broaden tax revenues and streamline tax expenditures.
Further recommendations included rebuilding financial sector buffers through enhanced oversight of banks and nonbank institutions. Directors encouraged mitigating Bitcoin risks by unwinding public sector participation in Chivo e-wallets.
The next Article IV consultation with El Salvador is expected according to standard IMF procedures for members with fund arrangements.