LatinNews Daily - 03 September 2020

* Ecuador’s President Lenín Moreno has announced that his government has secured a US$2bn loan from China, just days after the declaration of a provisional agreement to receive some U$6.5bn in credit from the International Monetary Fund (IMF). These funds will help plug Ecuador’s substantial fiscal deficit for this year, estimated to total US$12bn, and Moreno attributed his government’s success in accessing credit to the good faith shown in recent debt restructuring negotiations – particularly the decision to continue making repayments throughout the process. The government came under criticism at the time for prioritising debt repayments over emergency spending in response to the coronavirus (Covid-19) pandemic and the associated economic crisis, and there are concerns that this new debt could be similarly debilitating – rather than investing in economic reactivation, this money has already largely been earmarked as back payments to the country’s social security institute (IESS), municipal governments, and public sector workers.

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