The IMF agreed on Thursday to release nearly $500m to Ecuador as part of a $4.2bn lending programme, suggesting the Andean nation’s efforts to overhaul its finances remain largely on track despite violent protests and congressional wrangling over tax reform.
In a statement following a board meeting in Washington, the IMF said “the Ecuadorean authorities have demonstrated commitment to fiscal prudence, which remains key to fiscal sustainability. In this context, the recently approved tax reform will raise revenues and make the tax system more growth-friendly, simple, and equitable.”
It also said the Ecuadorians had “appropriately recalibrated their economic programme”. The government in Quito was expected to give more details on Friday of what this means. There has been some speculation that the government has sought permission from the IMF to extend the lending programme for an additional two years.
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