The International Monetary Fund (IMF) has approved a new disbursement of $118 million to El Salvador following the successful first review of the country’s economic program under the Extended Fund Facility (EFF). This brings total disbursements to approximately $231 million, as part of the $1.4 billion agreement approved earlier this year.
In its formal statement, the IMF’s Executive Board commended El Salvador for its strong commitment to macroeconomic stability, highlighting progress in fiscal consolidation, strengthening international reserves, and advancing governance and transparency reforms.
Key milestones include the approval of a new Fiscal Sustainability Law, improvements to public procurement regulations, and greater transparency of state-owned enterprises. These efforts have laid the foundation for increased investor confidence, more efficient infrastructure execution, and stronger institutional capacity.
Nigel Clarke, Deputy Managing Director and Acting IMF Chair, acknowledged El Salvador’s stable inflation, declining current account deficit, and continued economic growth.
The IMF also emphasized the importance of continuing spending efficiency, pension system reforms, and the mobilization of international financing to support strategic investments. The Fund noted that El Salvador’s secure environment and long-term growth strategy offer a “unique opportunity” to attract foreign direct investment, boost exports, and create jobs.
Finally, the IMF encouraged sustained structural reforms to close infrastructure and human capital gaps and called for enhanced financial oversight and liquidity buffers to ensure long-term financial stability.
