2024-03-16 03:45:16
During a meeting with Wall Street investors, President Noboa assured that he sees that Ecuador will close an agreement with the IMF in two months.
Los Ecuador bonds rose on Friday after the President Daniel Noboa meet with investors in New York and tell them that His government hopes to reach an agreement with the International Monetary Fund in about two months.
At the meeting, which he attended accompanied by the Minister of Economy and Finance, Juan Carlos Vega, and the Chancellor, Gabriela Sommerfeld, the Ecuadorian president transmitted an optimistic and reassuring message to Wall Street investors, as already reported by LA HORA.
This message, which includes the approval of several laws such as the one that makes it possible to increase VAT to 15%, has allowed the country risk to drop to 1,421 points; after having reached more than 2.00 points. In addition, it caused an increase in the price of Ecuador’s debt bonds.
For example, Bloomberg highlighted that Noboa’s efforts have caught the market’s attention, with the South American nation’s debt delivering bondholders yields of 36.5%.
However, The bonds are largely trading distressed, with investors estimating an 80% chance of default within five years.
That is to say, although in the short term the situation seems more controlled, and the current Government has more income, there are still no structural changes that ensure that the country will not again have a crisis equal to or worse than the one at the end of 2023 in Little time.
Expectations point to what the commitments of a new agreement with the IMF would be, from which the Noboa Government aspires to obtain at least $3,000 million in new financing.
The General State Budget (PGE) for 2024, which is currently being discussed in the Assembly, projects a fiscal deficit of a little more than $4.7 billion; But the Fiscal Policy Observatory warns that, through a combination of overestimating income and underestimating expenses, a gap of more than $5.7 billion would actually be covered up.
The IMF, before providing financing, must examine the fiscal figures and establish a real fiscal stability plan because, according to what Noboa presented to the Assembly, deficits of more than $4 billion a year are projected until 2027. (JS )
By: Diario la HORA