The International Monetary Fund on Thursday approved a delayed loan tranche for Ecuador, releasing nearly US$500 million under a three-year aid program. The IMF board gave the go-ahead for a US$4.2 billion loan in March to help support the oil-rich nation's economic reforms, but massive protests led by indigenous groups erupted in October when President Lenin Moreno scrapped fuel subsidies, causing gasoline prices to soar.
Protesters blocked roads and oil facilities in the Amazon for almost two weeks, halting distribution of almost 70 per cent of the country's crude oil.
Moreno is struggling with an economic crisis that he blames on waste and corruption by his predecessor's administration, and Congress in November rejected his initial tax reform bill before approving a modified version in early December.
The IMF statement made only a glancing reference to capital city Quito's difficulties, saying authorities have appropriately recalibrated their economic program to include a more moderate fiscal consolidation ... in response to recent developments and to protect pro-poor growth and social spending.
Protecting the poor and increasing the social safety net are central priorities in the government's program, Mitsuhiro Furusawa, the fund's deputy managing director, said in a statement.
And he said the government's recently approved tax reform will raise revenues and make the tax system more growth-friendly, simple and equitable.
The IMF conducts periodic, generally quarterly, reviews of a country's performance under the loan programs, including passage of agreed reform measures. The board approval Thursday combines two reviews, releasing a total of US$498.4 million to the government.