El Salvador will advance macroeconomic and fiscal sustainability with a $500 million loan from the Inter-American Development Bank (IDB). These funds will serve as budgetary support while the country implements structural reforms following the agreement reached in February with the International Monetary Fund (IMF).

The financing, approved by the IDB’s Board of Directors, will provide fiscal space for the government to promote measures to increase fiscal revenues, reduce public debt, and strengthen international reserves. In addition, it seeks to improve governance and financial integrity, key aspects for economic stability.
The loan, classified as a special development loan, has a seven-year term, with a three-year grace period and an interest rate based on SOFR. These conditions will allow El Salvador to implement reforms without putting further pressure on its finances in the short term.

The impact of the new financing will benefit salvadorans by ensuring greater economic stability and strengthening the country’s ability to attract investment. A stronger macroeconomic environment will also facilitate access to credit for businesses and contribute to employment growth.
This latest IDB operation is part of a series of initiatives approved since 2016 to support public policy reforms and institutional strengthening in El Salvador. These initiatives include projects to improve tax and customs administration and measures to mitigate the economic and social impacts of the COVID-19 pandemic.
With this new financial support, the Salvadoran government reinforces its strategy to achieve fiscal stability and consolidate a sustainable development model that benefits the population.
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