Ecuador Strengthens Its Growth Agenda with IDB Support

WASHINGTON - Ecuador will implement economic policies to boost economic growth and strengthen the business environment by stimulating private investment in strategic sectors such as energy and tourism, supported by financing of $200 million from the Inter-American Development Bank (IDB).

The economic policy reforms will improve the efficiency of the tax system, collection, compliance, and reduce tax evasion. These policy actions aim to expand the use of electronic means for tax payments and partial debit.

The program supports laying the groundwork for promoting more efficient public spending through changes focused on implementing quality spending tools to strengthen the public budget, such as thematic classifiers for gender, equality, and climate change; implementing results-based management in the chronic child malnutrition program, expenditure reviews, and defining prioritization criteria for public investment.

The program's financing also backs measures to strengthen strategic planning, coordination, and alignment of efforts between the public and private sectors through a national growth agenda. In addition, it will promote greater private investment in strategic sectors such as energy and tourism. The use of the Tourism Development Fund will be expanded, providing greater predictability in the budget for implementing promotion programs and stimulating private investment, thereby contributing to greater job creation.

This credit constitutes the first of two technically related but financially independent operations under the Programmatic Policy-Based Loan (PBP) modality, approved by the IDB's Executive Board. The loan has a 20-year amortization period, a 5.5-year grace period, and a rate based on SOFR.