Economy & Business - June 2024

ECUADOR: IMF comes to the rescue but demands fuel subsidy cuts

The executive board of the International Monetary Fund (IMF) announced on 31 May that it has approved a four-year, US$4bn arrangement with Ecuador under its Extended Fund Facility (EFF). The agreement had previously been agreed at staff level on 25 April, and the executive sign-off enabled the immediate disbursement of US$1bn to Ecuador. The agreement was seen as crucial to avoiding a debt default, with President Daniel Noboa’s government having warned immediately after it took office last November that the country was in dire financial straits. The IMF’s assistance comes with strings attached, however, and Noboa could see his first serious street protests over plans to eliminate fuel subsidies in line with the IMF’s expectations.

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