LatinNews Daily - 30 June 2025

*The International Monetary Fund (IMF)’s executive board has released US$118m in funding for El Salvador following the conclusion of a 2025 Article IV consultation and completion of the first review of its Extended Fund Facility (EFF) arrangement with the country. El Salvador’s 40-month EFF arrangement was approved by the IMF’s executive board on 26 February 2025 for some US$1.4bn. The programme remains focused on “strengthening public finances, rebuilding external and financial buffers, and enhancing governance and transparency frameworks to create the conditions for stronger and more resilient growth” according to an IMF statement. The same statement notes that El Salvador’s programme performance has been “solid”, with the economy “continuing to expand as macroeconomic imbalances are being addressed”. According to the IMF, El Salvador’s GDP growth in 2024 was estimated at 2.6%, and is projected to come in at 2.5% in both 2025 and 2026. In its statement the Fund also notes that “key fiscal and international reserve targets were met with margins and progress continues with the ambitious reform agenda in the areas of governance, transparency, and financial resilience”. As regards steps taken in the context of the first review, the IMF highlights the following: the enactment of a new fiscal sustainability law; the issuing of a presidential decree limiting exceptions to the procurement law; the publication of financial information on the largest state-owned enterprises; and the fact that information on public contracts has been made more accessible. It also highlights that steps continue to be taken to mitigate risks associated with cryptocurrency bitcoin, which the Salvadorean government made legal tender in 2021, and the unwinding of the public sector’s participation in the digital wallet app ‘chivo’ used to promote the use of bitcoin.

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