GUAYAQUIL (Reuters) – Ecuador has fully funded its budget for next year and is not seeking a new lending arrangement with the International Monetary Fund (IMF), the country’s economy minister said on Friday, adding that the government will maintain close ties with the fund .
The IMF this week completed the latest review of its $6.5 billion funding arrangement with Ecuador, paving the way for a final $700 million disbursement to the South American nation.
Although Ecuadorian authorities see the deal as a success, Ecuador will not need any funds from the IMF to fund its 2023 budget as it has resources sourced from other multilateral lenders and domestic debt, Economy Minister Pablo Arosemena said.
“We have already funded next year’s budget without counting on resources from a possible program with the IMF,” Arosemena told reporters in Guayaquil. “The idea is to continue working with the (International Monetary) Fund.”
The IMF agreement, which expires this year, set goals that included tax reform, audits of public companies like Petroecuador, anti-corruption efforts and helping the poor.
The deal also included a mechanism to eliminate fuel subsidies, which will total about $4 billion this year, for sectors that don’t need state aid.
“Not everything at the IMF has to do with resources. It also has a lot to do with technical collaboration and, most importantly, support,” Arosemena said.
The Ecuadorian government will decide in the first quarter of 2023 whether it needs a new loan agreement with the IMF.
Ecuadorian President Guillermo Lasso’s spending plan for 2023 provides for around $7.5 billion in funding and does not rule out the issuance of bonds on international markets.
The Ecuadorian government projects a budget deficit of $2.630 billion through 2023, down from the $3.783 billion originally projected for 2022.
(Reporting by Yury Garcia; Writing by Valentine Hilaire; Editing by Mark Porter)
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