A. M. The International Monetary Fund (IMF) approved a US$1.4 billion financing program for El Salvador, with an immediate disbursement of US$113 million. This agreement, under the Extended Fund Facility, has a 40-month duration and makes available an additional US$3.5 billion from the multilateral bank. The program seeks to strengthen public finances and improve transparency.
The IMF noted that the salvadoran economy remains stable thanks to growth in tourism and remittances, as well as improvements in security. However, it noted that the country still faces macroeconomic imbalances, such as high debt and barriers to investment. As part of the agreement, Nayib Bukele’s government committed to a fiscal adjustment of 3.5% of GDP over three years, starting with a reduction in spending on salaries in the 2025 budget.
The plan also includes the creation of international reserves and financial stability reforms. In addition, the government has promised to strengthen fiscal transparency and the fight against corruption, with measures such as new anti-corruption laws and public audits on the management of government funds, including those used during the COVID-19 pandemic.
As for bitcoin, the IMF acknowledged that recent changes to the Bitcoin Law guarantee its use only in the private sector and on a voluntary basis, eliminating the possibility of paying taxes with this cryptocurrency. Likewise, the government will limit its participation in economic activities related to bitcoin, aligning with the recommendations of the international financial organization.
President Bukele reacted to the announcement with the phrase “patience and trust”. Meanwhile, the IMF is confident that this program will help strengthen El Salvador’s investment and economic stability, ensuring a more sustainable management of public debt and fostering solid long-term growth.
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