2011年-IMF国际货币组织全球_El_Salvador_Second_Review_Under_the_Stand_60页_1mb

El Salvador: Second Review Under the Stand-By Arrangement Summary

Core Content

The document outlines the second review under the Stand-By Arrangement (SBA) for El Salvador, which was approved in 2010 and has a total access of SDR 513.9 million (300% of quota). The review was conducted by the IMF staff team, which concluded discussions with El Salvador officials on February 11, 2011, and the report was finalized on March 17, 2011. The views expressed are those of the staff, not necessarily the IMF Executive Board.

The economic program for 2011 is aligned with the medium-term objectives of the SBA, focusing on strengthening growth prospects, improving fiscal position, and continuing financial sector reform. The program aims to reduce the fiscal deficit to 3.5% of GDP and keep the public debt-to-GDP ratio at around 51% by year-end.

Main Views and Key Information

I. Developments Since the First Review

• Macroeconomic Performance:

  • Real GDP growth in 2010 was 0.7%, significantly lower than neighboring countries.
  • Inflation reached 2.1% by year-end, the lowest in the region, but slightly above initial projections due to higher food and fuel prices.
  • Balance of payments showed a current account deficit of 2.1% of GDP, with remittances recovering slowly and FDI inflows declining, leading to a balance of payments deficit of US$300 million.

• Fiscal Policy:

  • The fiscal deficit decreased to 4.2% of GDP in 2010, reflecting higher tax revenues from the 2009 tax reform and expenditure restraint.
  • Gross public debt reached 51.5% of GDP, in line with projections.

• Financial System:

  • Banks maintained adequate capital ratios and liquidity, with overdue loans stable.
  • Credit to the private sector remained subdued, and banks used liquidity to repay short-term external liabilities.
  • Interest rates declined, and deposits increased.

II. The Economic Program for 2011

A. Macroeconomic Outlook

• Real GDP growth is expected to reach 2.5% in 2011, driven by improved external demand and continued domestic recovery.
• Inflation is projected to rise to 4.8% (y/y), due to higher fuel and food prices.
• External current account deficit is expected to increase by more than 1.5% of GDP.

B. Fiscal Policy

• The fiscal deficit will be reduced to 3.5% of GDP, supported by improved tax collection and expenditure restraint.

• Tax revenue is expected to rise by 0.7% of GDP, due to the 2009 tax reform and revenue administration measures.

• The government is considering new tax simplification measures to align with neighboring countries and safeguard the revenue target.

• Expenditure management will focus on investment and social spending, with current expenditure rising by 0.2% of GDP.

• Government investment will increase by 0.2% of GDP, with an emphasis on infrastructure and rural development.

• Salary increases for low-wage public employees and new hires in security, education, and health will be one-off and targeted.

C. Financial System

• The financial system is being strengthened in line with the 2010 FSAP Update.
• Regulatory functions are being shifted to the central bank, with integration of bank, pension fund, and securities superintendencies planned by end-August 2011.
• Risk-based supervision is being introduced, with regulations on credit and liquidity risks expected by year-end.
• Bank resolution processes are being improved, and coordination among safety net providers is being enhanced.
• Lender-of-last-resort (LOLR) mechanisms are being developed, with resources potentially coming from the sale of government debt held by the central bank.

D. Other Reforms

• Public-private partnerships (PPPs) are being formalized to stimulate investment in infrastructure and public services.
• Sectoral development plans were launched in agriculture, tourism, and nontraditional exports in early 2011.
• A new development credit vehicle is being designed to provide long-term financing to productive sectors, with legislation expected by mid-2011.
• Fiscal contingencies will be minimized by focusing on profitable projects and gradual implementation.

III. Program Modalities

• Quantitative performance criteria for 2011 include a nonfinancial public sector deficit of US$817 million (3.5% of GDP) and a gross public debt increase of US$701 million.
• Structural benchmarks have been adjusted, with tax administration reforms delayed to June and December 2011 and investment funds bill approval rephrased to December 2011.
• Consultation clauses remain in place, requiring regular discussions with the IMF staff on corrective measures.

IV. Staff Appraisal

• The SBA has been effective, with strong program performance and substantial margins on performance criteria.
• Structural reforms have gained momentum, especially in subsidy and financial system reform.
• The 2011 budget is consistent with the fiscal deficit target.
• Fiscal consolidation remains a priority, with tax reform and expenditure restraint as key elements.
• The financial system reform agenda is progressing, with regulatory integration and risk-based supervision planned.
• Initiatives to boost economic activity may carry fiscal risks and require close monitoring.
• The staff recommends the completion of the second review under the SBA.

Key Documents Included

• Staff Report: Outlines the economic developments and policy implementation.
• Informational Annex: Provides additional details on the staff report.
• Press Release: Summarizes the Executive Board's views on the program.

Attachments

• Letter of Intent (LOI): Details the government's commitments.
• Memorandum of Economic and Financial Policies (MEFP): Outlines the program's objectives and measures.
• Technical Memorandum of Understanding (TMU): Specifies the terms and conditions of the SBA.

Conclusion

The 2011 economic program is well-aligned with the SBA's medium-term goals, with strong performance in fiscal and structural reforms. However, downside risks to growth and fiscal sustainability remain, necessitating continued monitoring and support from the authorities. The IMF staff recommends the completion of the second review and further implementation of structural and fiscal reforms to ensure long-term economic stability.