The Inter-American Development Bank (IDB) has approved a $500 million Special Development Loan for El Salvador, aimed at ensuring macroeconomic and fiscal sustainability. This funding will support key structural reforms aligned with the country’s agreement with the International Monetary Fund (IMF) reached in February.
The IDB highlighted several focus areas for the loan:
- Fiscal Strengthening: The country aims to increase its primary surplus from 0.2% in 2024 to 3.7% by 2027.
- Tax Modernization: The introduction of digital tools, such as electronic invoicing, will enhance efficiency and revenue collection.
- Spending Efficiency: Adjustments to the public wage bill, pension reform, and improved procurement will optimize resource allocation.
- Rebuilding Reserves: Strengthening financial buffers will enhance economic stability.
- Transparency Measures: The government will implement new anti-corruption policies and full contract disclosure to ensure accountability.
“We will provide budgetary support so the country can implement key structural reforms following an agreement with the IMF in February,” the IDB stated.
This financing represents a significant step toward long-term fiscal sustainability, reinforcing El Salvador’s economic resilience and promoting responsible financial management.
