IMF and El Salvador assess the region’s economy

The Government of El Salvador received a visit from the Executive Board of the International Monetary Fund (IMF) to evaluate the economy of the region. The meeting is held as part of the traditional visit that the IMF maintains with member countries in accordance with Article IV of its constitutive agreement.

The President, Nayib Bukele, previously announced that he had completed the payment of 800 million dollars in bonds that were due in January. The IMF mission was headed by Raphael Espinoza and government representatives and representatives from other sectors of the region such as businessmen, academics and unions participated.

The IMF interdisciplinary team will compile information on the region’s economy and finances and prepare a report that will be presented to the authorities of El Salvador.

One of the points under discussion with the IMF, according to the Minister of Finance of El Salvador, Alejandro Zelaya, is “to suppress the current section of pensions from the accounts of the non-financial Public Sector (SPNF).” The debt of the Pension Obligations Trust (FOP) is about 6,089.2 million dollars in series A of Pension Investment Certificates (CIP), which is equivalent to 19.1% of GDP. While the SPNF debt is 24,102.7 million dollars, practically 75.8 % in relation to GDP.

The previous 2022 IMF report highlighted that the emergency caused by the pandemic interrupted ten years of economic growth in the country, but highlighted a quick recovery due to external demand, remittances and emergency management. However, they warned about the risks for the consumer and the financial stability of the country due to the use of Bitcoin.

K. Tovar

Source: Cointelegraph

(Reference image source: Washington Post)

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