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El Salvador: Request for Extended Arrangement Under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for El Salvador

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  • International Monetary Fund

Abstract

This paper explores El Salvador’s Request for Extended Arrangement under the Extended Fund Facility. The Salvadorean economy is steadily expanding on the back of robust remittances and tourism, and a greatly improved security situation. External deficits have narrowed, inflation has fallen, and recent liability management operations have reduced near-term financing needs. Building on recent progress, the authorities’ IMF-supported program aims at addressing macroeconomic imbalances and strengthening governance and transparency, with the objective of boosting El Salvador’s growth prospects and resilience. Decisive ownership and implementation and broad political and public support will be critical to ensure the program’s success. Agile policy making and contingency planning will be essential to manage downside risks in the context of dollarization. The IMF-supported program aims to ensure conditions are in place to boost El Salvador’s growth prospects and resilience by strengthening public finances, rebuilding external and financial buffers, and improving governance and transparency. Bitcoin risks are also being addressed.

Suggested Citation

  • International Monetary Fund, 2025. "El Salvador: Request for Extended Arrangement Under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for El Salvador," IMF Staff Country Reports 2025/058, International Monetary Fund.
    • Handle: RePEc:imf:imfscr:2025/058
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