IMF and the Ecuadorian Authorities Reach Staff-Level Agreement on the First Review of Ecuador’s Economic Program Under the Extended Fund Facility
November 23, 2020
End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.
- IMF staff and the Ecuadorian authorities have reached a staff-level agreement on economic policies to conclude the first review of the 27-month EFF program. Ecuador would have access to about US$2 billion financing once this review is completed by the Executive Board.
- The economic recovery is currently under way, following a severe contraction in the second quarter as a result of the pandemic.
- In the near term, the authorities plan to implement key legislative reforms to enhance the anti-corruption framework and strengthen the central bank autonomy.
An International Monetary Fund (IMF) mission led by Ms. Ceyda Oner
conducted virtual meetings with the Ecuadorian authorities from October 28
to November 20 to discuss progress on reforms and the authorities’ policy
plans in response to the COVID-19 and oil price shocks. Ms. Oner issued the
following statement in Washington DC today after the conclusion of those
“The IMF team and the Ecuadorian authorities have reached a staff-level
agreement on the first review of Ecuador’s economic program that is
supported by a 27-month Extended Fund Facility (EFF). The agreement is
subject to the approval of IMF management and the Executive Board in the
coming weeks, contingent on the implementation by the authorities of prior
actions and fulfillment of all relevant Fund policies. Upon completion of
the review, Ecuador would have access to about $2 billion (equivalent to
SDR 1.42 billion).
“We commend the authorities’ decisive policy actions to contain the
COVID-19 outbreak and their continued efforts to advance their reform
agenda, while taking steps to further stabilize the economy and expand
social assistance to protect Ecuador’s vulnerable families. New COVID-19
infections and deaths have moderated compared to the high levels seen
earlier in the year, and the Ecuadorian economy is showing tentative signs
of a recovery since the reopening began in July.
“Preliminary data point to a less severe contraction in economic activity
than anticipated in the second quarter of 2020. Taken together with recent
high frequency indicators, we now project the economy to contract by 9.5
percent in 2020, instead of 11 percent as projected at the time of the
EFF’s approval. Growth is expected to gradually reach its potential of 2½
percent over the medium term. Nevertheless, as in many other countries,
Ecuador faces significant uncertainty regarding the future path of the
pandemic and global oil prices, and risks to the
outlook are to the downside.
“The authorities met all quantitative performance criteria and indicative
targets for the first review of the program, with the fiscal balance target
being exceeded by a wide margin. The authorities have also brought an
additional 63,764 low income families on a net basis into the social
assistance programs between July and September and are making significant
progress toward their December goal of providing benefits to over 161,000
“In the remaining months of the current administration, the authorities
plan to implement key reforms to strengthen Ecuador’s institutions and
legal frameworks. In the near term, they are actively pursuing amendments
to their penal code to criminalize corruption and align their
anticorruption framework with international best practices. They are also
working on draft amendments to the Monetary and Financial Organic Code that
would strengthen the foundations of Ecuador’s dollarization regime and
protect the purchasing power of all Ecuadorian families.
“The authorities are moving steadfastly on a number of other important
reforms. They are working on the regulations to operationalize the recently
adopted organic budget code, improving the audit capabilities of the
central bank to make it a stronger institution, bringing transparency to
the assets of high level officials to improve governance and tackle
corruption, and last but not least, preparing a cash plan for 2021 to
better manage the public purse.
“Given the potential delays in key bilateral disbursements, the authorities
are making concerted efforts to secure additional financing from other
public and private sources.
“The mission met with Minister of Economy and Finance Pozo, Minister of
Labor Isch, General Manager of the Central Bank of Ecuador Artola, other
government officials, private sector participants, and civil society. We
thank the Ecuadorian authorities for the candid and constructive
IMF Communications Department
PRESS OFFICER: Raphael Anspach
Phone: +1 202 623-7100Email: MEDIA@IMF.org