The International Monetary Fund (IMF) Executive Board has completed the second review of Ecuador's Extended Fund Facility (EFF) arrangement and approved an augmentation of the program by SDR 750.4 million, approximately US$1 billion. This decision allows Ecuador to immediately draw SDR 438.4 million, about US$600 million.
Ecuador's EFF arrangement, which spans 48 months, was initially approved on May 31, 2024, providing access to SDR 3 billion or about US$4 billion. The program aims to support policies that strengthen fiscal and debt sustainability, protect vulnerable groups, rebuild liquidity buffers, safeguard macroeconomic stability, and advance structural reforms for sustainable growth. With the recent approval, the program's total access increases from around US$4 billion to US$5 billion.
Despite challenges such as security issues and electricity blackouts due to a historic drought, Ecuador's program performance has been strong. The authorities have successfully mobilized non-oil revenue and strengthened fiscal and external buffers while protecting vulnerable groups. All quantitative performance criteria for December 2024 and April 2025 were met with wide margins.
In light of tighter global financing conditions and volatile oil prices, Ecuador is implementing swift policy actions including high-quality fiscal and structural reforms. These efforts aim to enhance resilience and promote economic growth while continuing to protect vulnerable groups. The country is also pursuing new structural benchmarks to attract private investment in sectors like mining and energy.
Economic growth in Ecuador is projected to recover alongside low inflation. The current account balance is expected to record sizable surpluses due to strong non-oil export performance. The updated fiscal plan under the EFF is projected to maintain public debt on a downward trend.
Nigel Clarke, Deputy Managing Director and Acting Chair of the IMF Executive Board stated: "The Ecuadorian authorities have made significant progress in implementing their economic program supported by the Extended Fund Facility (EFF) arrangement."
Clarke highlighted that despite challenging circumstances, the authorities have successfully mobilized non-oil revenues, strengthened fiscal buffers, cleared domestic arrears while protecting vulnerable groups, advanced fiscal reforms amidst global challenges, boosted fiscal consolidation efforts by 1.1 percent of GDP during the program period alongside a more ambitious reform agenda aimed at fostering economic growth.
Efforts are underway to ensure protection for vulnerable groups through enhanced social registry coverage and expanded cash transfers. Additionally, financial sector policy reforms are being implemented following recommendations from the 2023 Financial System Stability Assessment.
Clarke concluded: "Finally," noting that an ambitious structural reform agenda focuses on improving security situations; strengthening energy resilience; promoting inclusive growth; attracting private investment into high-potential sectors such as mining hydrocarbons & energy; strengthening governance & Anti-Money Laundering/Combatting Financing Terrorism frameworks."