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El Salvador announces possible agreement with the IMF

San Salvador, Jun 11 (Prensa Latina) El Salvador is close to an agreement with the International Monetary Fund (IMF), which is characterized by demands that cut social plans.

“We are about to agree with the IMF,” the Vice President of the Republic, Félix Ulloa, told Russia Today (RT), asserting that El Salvador surpassed the requirements established by the IMF to reach an accord for 1.3 billion dollars.

Without giving further details, the dignitary maintained that everything has now been overcome regarding the demands on the use of bitcoin as legal tender.

Although he did not give further details, Ulloa mentioned the diversification of credit sources from which the government of El Salvador obtained financing to carry out its projects. “El Salvador has always tried to diversify its external debt, we have not only stayed with traditional institutions, such as the World Bank; the fund with whom we are about to reach an arrangement,” he said.

However, popular sectors recalled that President Nayib Bukele announced in his opening speech, that for this second term, he will focus on solving the problem of the economy while anticipating the application of “bitter medicine.”

The president spoke of “a new treatment” to heal the economy after finding the solution to security problems, saying that “perhaps we will also have to take bitter medicine,” which could be a preview of a government commitment to reach an agreement that will further tighten the belt of common people.

For the World Bank, the agreement with the IMF would allow El Salvador to meet its financing needs for the next two years, although it will increase its public debt even more, and the possible decrease in spending will likely fall on social programs.

The big question now is what will be the “bitter medicine” that Bukele will prescribe to his countrymen, as part of his plans to get the economy back on track?

jrr/llp/arc/lb

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