Moreno toured in Pastaza the Plan Casa para Todos, which is part of social spending. Photo: courtesy Presidency. Evelyn Tapia Editor (I) READ ALSO Starting today (May 13, 2019) a team from the International Monetary Fund (IMF) will work together with government officials in following the agreement with the multilateral, which allows receiving financing for USD 4 200 million through 2021.
The IMF team is led by Anna Ivanova, confirmed the multilateral. The meetings will be held with authorities of the Ministry of Finance, the Central Bank and other entities, as well as representatives of the productive sector, economic analysts and others.
The visit could last between a week and 10 days, explains Mauricio Pozo, who was finance minister in 2003, when the previous agreement with the Fund was signed.
The commission’s visit is key, as the team prepares a report on the goals achieved and will present it to the IMF Board. In this instance, if the country complied with the agreement in the first three months, the multilateral will make the next disbursement.
The former minister adds that the government must be proactive if it has problems with the dates on which it must meet the goals, “and dialogue with the Fund before the evaluation period expires. Anticipate to negotiate with the entity, which is now more flexible than before, “he says.
Walter Spurrier, director of Weekly Analysis, details that since the agreement was signed in March, the report could be submitted in mid-June, because the agreement establishes quarterly goal revisions.
Until last Friday, the country obtained 32% of the USD 9 035 million that the country needs financing for this year. So far, the fiscal coffers have received USD 652 million from the Monetary Fund.
The disbursement of these resources was made on March 13. Then, the Government informed that part of this money would go to programs and projects of health, education and generation of employment, which are part of the Annual Investment Plan of 2019 (PAI).
The Minister of Finance, Richard Martinez, also explained that the second disbursement is expected to be for USD 350 million. In the letter of intent that the Government signed with the multilateral, fiscal and monetary goals were established that had to be met until the end of March.
The following goals will be evaluated with a cut at the end of the months of June, September and December. In the fiscal area, for example, the agreement with the entity establishes that in the first quarter the expenditure on social assistance will increase by USD 175 million.
Last week, the Government announced for example that it will increase the coverage of beneficiaries of the My Best Years social program, for which it will invest USD 50 million. While monetary, the program indicates that in the first quarter, the stock of international reserves should be located at USD 1 823 million.
According to data from the Central Bank, until May 2 international reserves are located at USD 3 398.6 million. In April, the Regime also reduced most of the outstanding payments it had with state contractors. Ecuador also committed to lower spending on government salaries, public companies and social security.
The fulfillment of the goal could come from the side of the state firms, which lowered their payroll by 10%, and from the IESS, where 1,000 went out. On the other hand, in the Government the expenditure rose slightly until April. José Emilio Vásconez, UIDE teacher, explains that fulfilling the goals has contributed to the country risk indicator falling to 584 points.
In January 2018 it was at 430. The lower this indicator is, the easier it is to access cheap financing. For Pozo, it is a good sign that the government has reduced the fiscal deficit, although the adjustment has been made more by a reduction in investment and not in wages. (I)