2024-08-03 08:40:39
Juan Carlos Vega Malo, Minister of Economy, said that the boards of directors of the World Bank, IDB and FLAR will meet in July 2024 to approve more financing for the country.
In total, multilaterals are expected to inject $4 billion this year. The Government says that progress is being made in covering arrears and that the second half of the year will be better than the first. However, the total level of arrears, compared to that of the end of 2023, has barely dropped by just over $200 million. What is Daniel Noboa’s Government spending on?
On July 8, 2024, during an interview with Radio Centro in Guayaquil, the Minister of Economy, Juan Carlos Vega Maloassured that this year the arrival is expected Ecuadorian economy of a total of $4 billion credits of multilateral organizations.
“Of that total, $1 billion has already been received and that has made it easier to move forward with the huge arrears we had from the previous Government, which are being met with permanent income,” he said.
Vega Malo announced that this month of July the board meetings of both the World Bank (WB), Inter-American Development Bank (IDB) and the Latin American Reserve Fund (FLAR).
The three are expected to approve an additional $2.5 billion in loans for Ecuador, with $500-600 million pending by the end of the year.
“These resources will be used to generate public works, reactivate the economy and bring better days and economic growth capabilities to Ecuadorians,” said Vega Malo.
What have the first IMF disbursement and the revenue from more taxes been spent on?
The Minister of Economy explained that the resources received from debt are directed to specific issues such as public investment and strengthening the capacity of the State; but at the same time they allow a similar amount, which would not otherwise have been available, to be used to catch up with the Local governmentsThat is, permanent income is released to cover pending payments.
According to Vega Malo, payments to local governments are already up to date by 2024.
“This allows them to pay their salaries, to start doing their own work, so that people can receive this money and pay the stores, the cooperatives, and the economy can be reestablished.” payment chain“, he pointed out.
He also assured that the additional income from the IVA, Temporary contributions and the increase in the Tax on the Exit of Foreign Currency (ISD) have mostly gone to security and health.
«The revenue from the VAT increase only began to enter the treasury in May. These resources are being used primarily to strengthen our security forces. The resources from the budget increase requested by the Police and Armed Forces“, he pointed out
On the health issue, Vega Malo said that work is being done to unblock payments due to the lack of audits and reviews.
«Since this week we are making very important payments to the IESSthe Ministry of Health, Solca, dialysis companies and the Guayaquil Charity Board to comply with its obligations,” he announced.
An additional $100 to $140 million is expected to be allocated to cover health needs
A thorough review is also being carried out because very high costs have been detected in referrals made to the private sector, for example, to dialysis machines. This is to prevent any harm being caused by excessive fees in the case of all external providers.
But, despite the official discourse, during the first half of 2024, the execution of Annual Investment Plan In sectors such as health, it was 13.8%.
The government is optimistic, but reality tells a different story about the economic crisis in Ecuador
The Minister of Economy assures that significant progress has been made in covering the arrears that have been dragging on since 2023. However, the figures for the real economy and the treasury tell a different story.
Former Minister of Economy, Fausto Ortiz, explained that at the end of 2023 the arrears were $5.563 billion.
By April 2024, $1,874 million of closed budgets from previous years (arrears from other years) have been “managed” to be reduced, while during the current year arrears of $1,642 million have accumulated. Thus, the net reduction in arrears amounts to $232 million.
According to Ortiz, the total level of arrears went from $5.563 billion in December 2023 to $5.331 billion in April 2024.
As LA HORA analyzes in the article titled «The six economic figures that could ruin Daniel Noboa’s dream of re-election»
The first half of 2024 closed with additional arrears of around $1.4 billion (less than the $300 million reduction recorded until April), affecting suppliers, IESS, local governments, among others.
Minister Vega Malo believes that the private sector is optimistic about the Noboa Government and that the second half of 2024 will be better than the first half.
By: LA HORA Newspaper