LatinNews Daily - 01 October 2020

* The International Monetary Fund’s (IMF) executive board has approved the US$6.5bn Extended Fund Facility (EFF) credit agreement reached with Ecuador in August, with an initial US$2bn disbursement due to arrive today (1 October), and a further US$2bn by the end of the year. IMF managing director, Kristalina Georgieva, voiced optimism that the deal “will help the country in its efforts to protect lives, stabilise the economy, and lay the foundations for strong and inclusive growth”. However, critics maintain that the conditions attached to the agreement - such as a commitment to reduce emergency spending in 2021, and to pass a package of fiscal reforms - could slow the recovery of Ecuador’s economy in the wake of the coronavirus (Covid-19) pandemic, and make it difficult to pay off this debt. Ecuador’s central bank (BCE) has reported that the country’s economy contracted by 12.4% year-on-year in the second quarter of 2020, and the IMF is currently predicting an 11% contraction for the year as a whole.

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