LatinNews Daily - 29 May 2020

* The Inter-American Development Bank (IDB) has approved a US$250m loan for El Salvador, to finance measures to contain the coronavirus (Covid-19) pandemic, mitigate its impact on vulnerable households, and promote countercyclical policies that reduce the effect on the economy and mitigate the drop in short-term tax revenues. According to an IDB press release, the loan also “includes commitments from the authorities to reduce the fiscal deficit, focus public investment on areas of high relevance for economic recovery, and maintain a competitive and transparent economy once the health emergency is overcome”. The IDB noted that El Salvador is carrying out various measures to assist individuals and legal entities affected by the pandemic. These include the temporary suspension of payment for services such as drinking water, electricity, and telecommunications; a transfer of US$300 to almost 1.5m vulnerable families who lost sources of income; a monthly bonus of US$150 to essential public employees; and the extension of the 2019 tax payment deadline for several types of taxpayers. The loan is for a seven-year term, with a three-year grace period and an interest rate based on the London Inter-Bank Offered Rate (Libor).

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