IMF in Ecuador's Sight

ECUADOR - In Brief 28 Apr 2016 by Magdalena Barreiro

The earthquake of last April 16, has forced the government to seek help from the IMF. Minister of Finance Fausto Herrero confirmed he is working with multilateral to set a fast loan agreement to cover part of the losses from the natural disaster. He insisted, however, that the loan must come "without the imposition of a program". The IMF has not given details on the operation, either. On the other side, according to estimates from the IRS, the value added tax collections will be 20% short from estimations given in this year's budget. In addition, the Director Paola Hidalgo, informed that an increase of 2% on this tax will reduce collections by 3% according to a model developed by the IRS. Therefore, President Correa's proposal to collect funds to help with the above mentioned losses seems to be not only insufficient but detrimental. We are waiting to see what is the reaction from Correa after Hidalgo's statements.

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