Rodrigo Valdés, Director of the Western Hemisphere Department at the IMF, and Nigel Chalk, Deputy Director, presented key findings from the Regional Economic Outlook for the Western Hemisphere during a press briefing. The region has maintained stable economic performance in the first half of 2025, with growth projected to hold at 2.4 percent this year and slightly moderate in 2026. Despite global uncertainties, favorable external conditions—such as stabilized commodity prices, easing financial conditions, and a weaker U.S. dollar—have supported regional resilience.
Domestic labor markets remain strong, underpinning private consumption across most economies. Additionally, the region’s relatively low exposure to U.S. trade tensions and lower tariff burdens compared to other regions have acted as protective factors. However, macroeconomic policy management remains complex in several countries. Although fiscal positions have improved in many nations, structural primary balances remain below expectations, signaling delays in fiscal consolidation. Rising public debt levels underscore the urgency of strengthening fiscal frameworks to safeguard debt sustainability and enhance monetary policy effectiveness.
Inflation continues to exceed targets in some countries, constrained by robust domestic demand and lingering fiscal pressures. Nonetheless, central banks have maintained data-driven approaches, keeping inflation expectations anchored. Exchange rate appreciation in certain economies has also contributed to disinflationary momentum. Looking ahead, potential growth remains subdued due to sluggish labor force expansion, weak capital investment, and stagnant productivity. Two analytical chapters in the report highlight structural challenges: one examines how high public debt limits central bank flexibility, emphasizing the need for fiscal reforms; the other investigates firm-level inefficiencies, including regulatory barriers, financial constraints, and limited competition, which hinder productivity gains.
The IMF continues to support regional economies through policy advice, capacity building, and financial assistance. Since April, Barbados completed its Extended Fund Facility and Resilience and Sustainability Facility arrangements, while Costa Rica launched a new Flexible Credit Line. Colombia, however, chose to cancel its FCL arrangement, reflecting its own policy priorities and existing reserve strength, though fiscal slippage influenced the decision.
Valdés noted that while political cycles, including upcoming elections in 2025–2026, introduce uncertainty, fostering consensus on core economic policies can mitigate volatility. He emphasized the importance of reallocating spending toward growth-enhancing investments in education and health, improving tax collection, and addressing budget rigidities that limit fiscal flexibility. On remittances, while flows to Central America remain resilient, risks loom due to tightening U.S. labor markets and irregular sending patterns.
Regarding Brazil, the IMF acknowledged strong growth performance despite recent fiscal setbacks, expressing confidence in the government’s ability to adjust revenues and expenditures to meet fiscal goals. In Honduras, economic performance under its IMF program has been solid, supported by favorable coffee prices and remittance inflows. For Mexico, nearshoring trends and export diversification have helped sustain exports despite trade tensions, though the outcome of USMCA negotiations remains critical.
Canada faces challenges from U.S. trade policies, but opportunities exist in reducing internal trade barriers through comprehensive regulatory reform. In Chile, public debt is deemed sustainable due to strong institutions, though building fiscal buffers and streamlining investment permitting are recommended. Ecuador’s reform program is progressing well, with fiscal targets met and disbursements pending Board approval. Bolivia remains under close watch ahead of elections, with the IMF ready to engage swiftly with any incoming administration seeking support.
Valdés concluded by stressing that while external conditions are shifting, proactive policy adjustments—such as reinforcing fiscal frameworks, rebuilding reserves, and advancing structural reforms—are essential for long-term resilience and growth.
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Press Briefing Transcript: Regional Economic Outlook for the Western Hemisphere, Annual Meetings 2025
Speakers: n nRodrigo Valdes, Director of Western Hemisphere Department n nNigel Chalk, Deputy Director Western Hemisphere Department n nModerator: n nJulie Ziegler, Senior Communications Officer n nMS. ZIEGLER: Good afternoon, everyone. Welcome to the press briefing for the Regional Economic Outlook for the Western Hemisphere. And just to note, the report was just published moments ago on IMF.org. I am Julie Ziegler with the Communications Department and let me start by introducing our panel today. n nTo my immediate left is Rodrigo Valdés, and he is Director of the Western Hemisphere Department, and he’s joined by Nigel Chalk, who is Deputy Director in the Western Hemisphere Department as well. n nI’m going to turn it over to Rodrigo for opening remarks and some updates. Rodrigo, the floor is yours. n nMR. VALDES: Thank you, Julie. Let me start by saying that over the last past months, Latin America and the Caribbean have been navigating through shifting winds and a changing and uncertain global environment. Our regional Economic Outlook, our REO, as it’s known, discusses how the region has fared and the challenges ahead. Let me share now a few highlights from our report. n nGrowth in Latin America and the Caribbean has experienced no major disruptions in the first half of this year, and it’s projected to remain steady at 2.4 percent in this year 2025 and moderate very slightly next year, although risks are clearly to the tilting to the downside. n nDespite the uncertainty, global conditions have been broadly supportive for the region. Commodity prices, for example, have stabilized after a brief period of volatility in the first part of the year, financial conditions have eased amid declining sovereign spreads, and a weak U.S. dollar in comparison to last year. Importantly, regional exports have kept pace with global trends of readily firm trade. Domestically, labor markets remain robust, generally supporting private consumption in most economies. Also, low exposure of many economies to the U.S., lower tariffs for the region in comparison to other regions, also have provided some buffers. And against this background, macro policy calibration remains a challenging topic in several countries. n nWhile most countries have strengthened their physical positions, the reality is that structural primary balances today remain lower than anticipated, indicating unwelcome delays in fiscal consolidation. There are good plans, but plans are usually postponed. In fact, with public debt ratios rising as we see in the region, fiscal consolidation is increasingly important to mitigate risks of the compression of risk premiums. Insufficient fiscal effort also complicates not only debt sustainability, but the effectiveness of monetary policy, and I will come back to this later. n nOn the monetary policy front, inflation remains above target in some countries amid relatively more balanced risks in comparison to output. Robust labor markets and fiscal concerns are slowing disinflation, but at the same time, the recent exchange rate appreciation is helping in some cases. Central banks in the region have responded appropriately. They remain data-driven, and inflation expectations are stable but also remain a bit above targets in some cases. Continued caution is warranted in this case, especially in countries where economic slack is not evident and inflation remains above target. n nLooking ahead, the region’s potential growth remains stuck at its low level that we have seen historically and clearly lagging emerging market peers around the world. This reflects slowing labor force expansion, low capital accumulation, and especially stagnant productivity. This year’s report has undertaken two analytical studies to better understand some of the policy challenges of the region. n nOne focuses on the interaction between monetary policy and fiscal policy. Here we see that reforms to enhance central bank independence have helped a lot the region and the achievement of price stability. However, we provide evidence on how high public debt so the fiscal side of the equation and deficits can constrain monetary policy. So, to safeguard price stability, countries must focus on advancing fiscal consolidation and improving fiscal frameworks. Lower debt levels also make monetary policy more effective, adding to the convergence to inflation targets. n nThe second analytical effort investigates some drivers of low productivity growth in the region. Exploring firm-level data, we show that this is partly explained by persistent resource misallocation and sluggish productivity growth among firms. More productive firms in the region tend to face barriers to expand, which calls for reforms to address these frictions, which include safety-based regulations, including taxes, financial constraints, and limited competition. n nLet me also say that the Fund remains closely engaged with the region through policy advice, capacity development, and financial support. n nIn terms of program engagement since April, the last time we saw each other, I can inform that Barbados completed its arrangement under the Extended Fund Facility and the Resilience and Sustainability Facility, and a new Flexible Credit Line, an FCL, has been launched with Costa Rica, while Colombia cancelled its FCL. n nTo sum up, the global landscape is shifting, but this is not a reason for inaction. As the saying goes, countries may not control the winds – ships is actually the saying- but they can adjust their sails. Reinforcing policy frameworks, rebuilding fiscal buffers, and fostering growth opportunities are the sails that need to be adjusted. n nBefore returning to Julie, let me also remind you that I will be leaving the Western Hemisphere Department soon, actually by the end of this month, moving to the Fiscal Affairs Department. And as you probably know, the Western Hemisphere’s new Director will be Nigel Chalk, sitting here. He already supervises several countries and activities of the region, and this also guarantees a seamless transition for us. n nSo, back to you, Julie. n nMS. ZIEGLER: Thank you, Rodrigo. So, before we take your questions, let me please share some housekeeping items. n nThe first is a reminder that the press conference is on the record. And second, if you have a question, could you please raise your hand either in the room or virtually. And if I call on you, will you please also state your name and your affiliation before you ask your question. And for those of you joining us online, please keep your camera on, as we will not be able to take your question unless we can see you. Finally, please keep your questions brief. We will have a hard stop today and we will try to get to as many questions as possible in the time we have. n nSo, let’s begin with questions on the region. And to be clear, by this I mean questions about groups of countries such as Latin America, the Caribbean, or the entire Western Hemisphere. We will come to country- specific questions after that. So, let’s start. Anybody with a question on the region, go ahead. Right here. n nQUESTIONER: Thank you for having me. My question is about the elections. Latin America faces several elections in 2025 and 2026. From the IMF’s perspective, what are the main risks or the cycles posed to fiscal discipline and investor confidence? n nMR. ZIEGLER: Could we take a couple more on the region? Anybody else? Lady there, the glasses. n nQUESTIONER: Envisioning improving efficiency, how can Central American governments reallocate spending in education, health, and infrastructure without increasing total spending? Especially when we are seeing annual budgets increase percentages of spending in security and military. And what do you foresee will be the impact on local economies with expected decreasing remittances from the United States to Northern Central America? And what should countries do to prepare? n nMR. ZIEGLER: Maybe one more on the region. Yes, the gentleman, the sweater back there. Thank you. n nQUESTIONER: A question for Dr. Valdes. You’re stepping down now, so I’d like to know some of your reflections on what you’ve seen in your tenure as head of the Western Hemisphere Department. n nMR. VALDES: Okay, thank you for the question. I will take this bunch, then Nigel will take others, but let me start by political cycles. n nThis is a normal process of all countries. Of course, there is always some noise around that, but it’s part of the normality. First, the only thing that I would like to stress is the importance of building consensus around different, very important state policies. For example, fiscal behavior. It’s much easier when there’s a consensus around that and therefore, the political cycles do not produce more noise than usual. In terms of how to spend more on certain things that will help growth, the first is relocation, for sure. Actually, the Fiscal Monitor has a special chapter about that; how important it is to reallocate from some current expenditures to some types of investments, like in education or health. n nSecond thing, in the region, we need to be cognizant that several countries have taxes to GDP ratios that are relatively low in comparison to other regions. So, there’s a space there also to mobilize new resources for certain expenditures. n nThird thing that I would like to mention is that there are certain rigidities in some countries that are very important to address. This is not easy because several times it’s entrenched in a constitution or in laws. But it will be important for countries to tackle those reforms, to have space of maneuvering. In some cases, we see up to 90 percent of the budget. That is super rigid. That is a challenge that needs to be tackled. n nFinally, let me just say one thing about security. When we talk about security in the region, it’s very different than when you think about security, for example, in the developed world, where there is a strong demand for spending, more security, but that is more external security. In the region, we’re talking about internal security, which is very important for growth. What we have seen in previous REOs is that that’s something that pays off because investment is very related to that. n nVery quickly on remittances. Remittances have been behaving very well in Central America. In Mexico, we have seen more sluggish or even dropping remittances. However, where we should not take confidence on that, we see that unit remittances are bigger. So, it seems that there’s a lot of money being sent as one-offs, or at least not persistent in time. The second thing is that the labor market in the U.S. is not conducive right now to a lot of hiring of new people, especially immigrants. And therefore, that is another source to expect less remittances. But this is not happening. This is — they happen. It’s a risk that we have to be careful and monitor. n nFinally, very quickly, what has changed in I have been two and a half years here. I came when we were basically focused on COVID scars. Also, the Russia war in Ukraine was very important as a new shock. Inflation was very high; was coming down, but was really, really high. And also, the region was making a lot of progress in fiscal consolidation. Again, we were coming out of COVID, and we were surprised of how ahead of the curve was fiscal in the region. Moving forward two and a half years, and inflation has come down a lot. It’s not there yet, but I would say kudos to the central banks in the region. They have done a very good job in controlling inflation. I would say also that on fiscal, let me put it this way, the initial impulse sort of waned, and what we are seeing now is more fatigue of fiscal consolidation, and we need to keep that back. n nAnd finally, I would say that today we see a more relevant discussion about growth. Two years ago, three years ago, it was more of macro policies, short run, the region has been very resilient, and that allows countries to think about more medium run. And that is very important. And thinking about how to increase growth is, I would say, something that is becoming more common in countries in policy discussions. And that’s good news. There’s a lot to be done there. Ultimately, without growth, it’s very difficult to succeed. n nMS. ZIEGLER: So, I think we can turn to some country questions and again, I will be bunching them together. So, we will stick with one country before we move on to another. So, let’s go, would you like to ask a question? n nQUESTIONER: The Brazilian government suffered a significant loss in fiscal policy last week in Congress with the overturning of a measure intended to raise taxes. But the IMF revised projections with a less pessimistic view about fiscal policy and a more optimistic growth outlook. Why? What is the IMF expecting from Brazil in terms of fiscal/monetary policy and growth? And how concerned about the private credit risk in Brazil, because we saw cases here in Brazil, too. n nMR. ZIEGLER: Staying with Brazil, do we have any other questions in the room or online? Just Brazil? n nMR. VALDES: Let me start first saying that Brazil has surprised us a lot to the upside in the last three years. It’s the country where we have revised up probably growth more, even with revised potential growth some time ago. So, the news has been good in general in the last few years. Of course, they had this inflation increase in the last few quarters that the Central Bank had to take care of. But also, it’s very interesting to see how mature is the inflation targeting regime and how the Central Bank has been managing this process. n nThe fiscal side, of course, the primary balance in our forecast has changed very little since the last rounds. In part because of the incoming data comes late for us, the cutoff of all these forecasts as much before. So, usually have this problem with many countries that the last, last news are not incorporating. Having said that, I would say that the measures that have been not approved can have substitutes. And we have confidence that the government can find ways to adjust spending and revenues in such a way that their plans in terms of fiscal can be met. Let me stop there on this. n nMS. ZIEGLER: Let’s turn to a question that we had received online. I believe it was on Honduras. So, after the Staff-Level Agreement of the Fourth Review of the program with Honduras, how do you assess the performance of the Honduran economy and the management of economic policies by the authorities? n nAnd while we are on that topic, are there any other questions on Honduras? Please go ahead. n nQUESTIONER: Considering Honduras, high dependence on the U.S. market for exports and economic growth, plus the expected decrease in remittances, which is 25 percent of our gross domestic product, how will the U.S. policies impact this Central American country? n nMR. VALDES: So, let me first start from the broader Central America issue and trade. It’s interesting to look at who competes with Central America in the export market in the U.S. at the product level. And from what we see there, the region has some disadvantages with a few countries but has a lot of advantages with other countries that have been suffering much higher tariffs at the end. So, if you calculate net, things are not that bad. In fact, exports from the region have been doing pretty well. n nIn terms of the program, what I can say for Honduras in particular is that we had Staff-Level Agreement not long ago, a few weeks ago, the economy has been performing very well. Growth has been very firm. We see the economy very resilient, also, on top of the program that has given a lot of confidence to all the actors there. Coffee prices and remittances are being pretty good this year, have helped also. n nI want to say that this is very good news for the country and also shows the commitment of the authorities with the program that, even in an election year, which is always attention for programs, they have been able to keep the fiscal in check and all the other commitments together with the monetary policy and exchange rate policies have been much firmer than before, giving at the end the country much more buffers and being much more resilient to eventual future shocks. n nQUESTIONER: Good afternoon. Dr. Valdes, I want to ask you, as you know, right now there are negotiations underway and there is a revision of the trade agreement with the United States and Canada. And I was wondering whether in your forecast for the coming year, you have or can you tell us whether you have contemplated this revisiting, particularly the potential bilateral agreement as the United States and the Trade Secretary has put forward, whether you’ve integrated that possibility? And also, another question I would like to know, whether you still contemplate the possibility of nearshoring? You have not mentioned it at all. And whether the reforms undertaken in Mexico with regards to the judiciary could discourage investment. n nMS. ZIEGLER: All right. Nigel, how about that’s for you? n nMR. CHALK: Yeah. So sorry the interpretation wasn’t great. But so, on the nearshoring, I think that there is some scope for Mexico to increase its share in the U.S. markets. We’ve actually seen quite a lot of that over the past several years. We’ve seen some supply chains moving to Mexico, a lot of foreign investment in Mexico to meet the U.S. markets. Obviously, the U.S. is a big export destination for Mexico. So, it will depend a lot, I think, on how the USMCA process evolves and what the conditions are under that agreement. That’s going to be very important for Mexico. n nIn terms of the trade measures the U.S. has taken so far, obviously has obviously been difficult for the country in Mexico, but actually exports have held up pretty well. We’ve been surprised at how well exports have been doing out of Mexico. And I think part of that is that Mexico is much more diversified in its export mix than it was even just a few years ago. We see a lot more electronics exports and high-value exports, and certainly, auto is an important sector. So, that is providing some buffer for Mexico. But a lot like as I said before, a lot will depend on how the USMCA renegotiation goes and what the conditions will be that eventually the three parties agree to in that agreement. n nQUESTIONER: [speaking off mic] n nMR. CHALK: Yes. So, I think we’ve obviously seen the judicial reform being put in place. I think it’s too early to say exactly how it’s going to feed through the economy. I think, you know, we think it’s very important to maintain the professionalism and independence of the judiciary and hopefully that’s going to be the case. I think it’s still a very early stage about how that’s going to feed into sort of investment decisions. To be honest, I feel that the trade aspects of it, right now, when we talk to investors, they seem much more focused on the trade regime than on the judicial reform. n nMS. ZIEGLER: Thanks, Nigel. I’m going to read a question on Canada, and after that, we’re going to go to Argentina. n nSo, the question is: Canada’s investment picture has been weak relative to the U.S. for nearly a decade. Do you worry that U.S. tariff policy will accelerate manufacturing and industrial investment declines in Canada? And then it says in other Western countries maybe and in other Western countries. n nSo, any other Canada questions before we take this one? n nMR. VALDES: Well, of course, tariffs have an effect. And in the last World Economic Outlook, there was specific calculations for Canada and Mexico, for example, in terms of what would happen to growth and other macroeconomic elements. But that doesn’t mean that Canada doesn’t have ways to do things and overcome the challenge. The Managing Director already mentioned fiscal policy in Canada, so I will ask you to see what was the exact line on that. But basically, that Canada has space to do more investments directly. n nWhat I could add here is that Canada has a big opportunity to lift internal barriers for internal trade. There are reasons, historical reasons, for which they have many regulations, which makes very difficult for different regions to trade with each other. They are making a lot of progress there. Perhaps the one thing that we would recommend is that that is done more in a centralized way rather than a bilateral way. If you want to have a picture of the world economy when we used to have bilateral trade agreements or global agreements, it’s better global agreements. The same happens with Canada. We would recommend, rather than bilateral, more comprehensive lifting of these regulations to facilitate the exchange. n nMS. ZIEGLER: So, I know we have a number of questions on Argentina, both in the room and online. We’ll take a few in the room, then we’ll take some on WebEx as well. So, I will start in the room, please. The gentleman on the end chair here in the suit. n nQUESTIONER: Hi, I would like to ask, how will the U.S. Treasury’s plan will coexist with the IMF’s program with Argentina and how is the coordination between the three. n nQUESTIONER: In the same way, how do you think the agreement between Argentina and the United States impacts Argentina’s program with the IMF? n nQUESTIONER: The program, the current Argentine program, stresses reserves accumulation. I’m wondering if you think the current FX band is still the best way to achieve that goal even after October 26 midterms. n nQUESTIONER: Well, my questions are related with the same issue. How do you evaluate the important help that the U.S. Treasury gives to Argentina? And more I would like, why do you think it’s necessary that help? And in the — in the same sense, what should Argentina do to accumulate reserves in the short-term time? Thank you. n nMS. ZIEGLER: Thank you. Any more in the room? And then I also know that we have another question online. All right, over there. The gentleman over there. n nQUESTIONER: Yes, I would like to ask you why on the work you mentioned reserve accumulation is important to access in international markets. What is the reason do you see in that action? Is it important is the capacity to repay? Which is. If you could give a more specific explanation. Thank you. n nQUESTIONER: It’s also on the peso. So, futures are seeing it bridging the band, and the market expects a more controlled weakness or even a full float. So, I wonder if you could tell us where the Fund expects to see the peso at the end of the year, and whether you would rather it be free floating? n nQUESTIONER: Hello. My question is regarding the declarations of President Trump last Tuesday, where he conditioned agreement with Argentina to a victory of Javier Milei’s party in the next legislative election. So, I was wondering how the IMF is afraid of how these economic agreements can affect the Argentinian economic development in the next years? Thank you. n nMS. ZIEGLER: Thank you. All right, Nigel. n nMR. CHALK: It’s so surprising that so many questions on Argentina. So, on the U.S. swap, so we welcome the support of our partners, which includes the World Bank, the IDB, but also the U.S. Why the U.S. swap? We think that the support from the U.S. Treasury is helping to stabilize markets, and it will complement the Fund-supported program. n nThere was a question on collaboration and cooperation. So, IMF staff have spent many hours and have been very deeply engaged with both Argentina and the U.S. Treasury through this process. And we’re committed to working with both parties to support stability and growth in Argentina. n nIn terms of the reserve accumulation, I think what we’re looking for is for a consistent set of macroeconomic policies that includes policies to reduce inflation, reserve accumulation, as many people have said, but also policies that will create the foundation for strong and sustained growth in Argentina. Thank you. That’s all I have. Thank you. n nMS. ZIEGLER: So, I want to turn online to a question on Chile. Chile has experienced an increase in debt levels in recent years. What is the IMF’s assessment of the sustainability of Chile’s public debt? What fiscal policies are needed to ensure sustainable growth without compromising the country’s finances? n nWhile we’re on this, any other questions in the room or online on Chile? Chile? n nQUESTIONER: Good afternoon. I love Chilean wine. But I want to ask Dr. Valdes about this. A year ago, the weather was good. So, not so good right now in Washington. Is it because the economy is cooling too? And why is Latin America growing only 2.4 vis- à-vis 3.2 in the world? And then a very specific question about Colombia. You mentioned Colombia forwent the Flexible Credit Line from the Fund. Did we make a mistake by not accepting that offer? Thank you. n nMS. ZIEGLER: Last call for Chile. n nMR. CHALK: Okay, let me start on Chile. So your question was basically about debt sustainability and fiscal policies. So, I think you can read our FCL review that was put out in August. We definitely find Chile’s debt to be sustainable. They’ve got very strong fiscal institutions, and they’ve got a good track record of sound fiscal policy in Chile. That is why they qualify for the FCL at the Fund. They have very strong policies. However, given the unpredictable global environment, which I think you’ve heard a lot of this week at the Meetings, we can see the wisdom of building some fiscal buffers right now and also building reserves in Chile. And that seems to be what the government’s plans are to do. So, we’re very supportive of the idea of a medium-term fiscal consolidation that gets something close to balance by 2029. That seems a good and balanced approach. But you know, the path to getting there, given the uncertain global environment, may not be as linear as we might think. n nAnd just one other thing, in terms of fiscal policies, we think it’s very important for the growth side of the economy to really make some efforts and some progress on raising productivity. And one of the key things we think for that is to improve the permitting process in Chile so the investment can move quite quickly. Right now, it seems to be quite bogged down by bureaucracy and permitting. So, moving those restraints on growth and on investment would be very positive for the country. n nMR. VALDES: Okay, let me start with the question on growth and the temperature. What you see in the region really is not that there are countries with a lot of slack, or, on the contrary, labor markets are pretty tight in many, many, many countries. So, it’s not a matter of a cyclical growth that you need in the region to catch up with the world. What you really need is to leave potential output growth in the region, and that is through reforms. n nWhat reforms can be done there? Well, if you look at the last, probably five Regional Economic Outlooks, you will have there the key topics that we think are very, very relevant. Let me mention, as a general topic, the rule of law and governance, but subtopics on that is, for example, the issues that we have with crime, the issues that we have with permitting, that it’s becoming very difficult to get permits for different projects. They have the — also the possibility of better trade or more trade within the region. That’s something that is additional, that could produce many, many gains. n nThen there is the issue of productivity. That is in this Regional Economic Outlook. We have a special chapter on precisely what could be hindering the growth of productivity. And we see that many policies penalize growth at the firm level in terms that you lose very quickly, some benefits. Anyway, the list is long. But what I want to stress that this is not a matter of trying to do fiscal or monetary policy to support growth in the short run. That will be a recipe for problems. Really, you need to work in the supply side of the economies. Let me also mention labor participation and women participation in the region. That has improved. But we are far away from where the developed world is there. n nIn terms of Colombia, what I can mention here is that this decision is clearly the decision of the authorities. But if you look at the last Article IV that was recently published, we see the economy with very strong buffers in certain areas and very, very good moral policy management. They have international reserves, for example, that are relatively high for what is the standards that we want to see in a country. But at the same time, this Article IV evaluated fiscal policy not in the same way that it used to evaluate fiscal policy. That it has to be in all policies very strong. We couldn’t say this is very strong, you know. Well, fiscal policies have been running rather large fiscal deficit, and the fiscal rule was suspended, etcetera. n nIn that environment, it was not easy for us to bring to the Board the possibility of drawing the FCL to — actually to revisit the drawing of the FCL if it’s done by our own rules, in the mid part of the two years that an FCL lasts. That process could not be completed. And in that environment, it made sense for the Central Bank to cancel the FCL. n nMS. ZIEGLER: Thank you, Rodrigo. So, we are going to turn to Ecuador now. We have a couple of questions on WebEx, and I’ll go to the room as well after that. n nQUESTIONER: So, I have a couple of questions. Do you think increasing public spending this year, especially on social subsidies, could affect a lot the results in the budget, the national budget? You know, this year the government has cut the diesel subsidy. That is an important measure. But what else? n nWhat other measures could the government in Ecuador take to reduce the fiscal problems for the fiscal deficit this year? And when do you think Ecuador is going to be able to return to capital markets? n nDo you think it’s possible that this year or maybe next year? And the last one, what factors were taken into account for the projection in the GDP for 2026? The review is lower than the projection for this year. So, what are the reasons for this lower projection? n nQUESTIONER: I have a question. The IMF this week announced its focus for Ecuador with a 3.2 percent growth. Do you consider this focus could be impacted as a result of the social unrest against the government, which has already been happening for 20 years, and all the losses that are piling up? Do you think this might elicit a downward review? n nMR. VALDES: So, not everybody knows, so I will say this, that we reached an agreement, a Staff-Level Agreement, with Ecuador authorities in a set of policies that are very strong. For us to be able to go to the Board with the program, with the Third Review of the program, we need to finalize a few internal processes, financing assurances, and we are ready to go to the Board to unlock disbursements of about $600 million. n nWhat I can say also, is that program performance remains very strong. This question of what else to do? Actually, the government has been doing a lot. It’s very amazing how this homegrown program has been developing and really delivering what the authorities decided to have as a program. n nIn fact, the performance quantitative targets that we have for August were all met. So that is also very good news, and why we were able to have a Staff-Level Agreement. This is very important. The fiscal part of Colombia (Ecuador), you know, was a big challenge for this government. They are making a lot of progress, and at the same time, they have been able to really increase support for vulnerable groups. So it’s a program that we think is working very well. n nOn forecast, it’s too soon to see whether the local discussion will have an effect. What I can say, though, is that the economy has been growing much faster than expected. Within the program is a case where that is not usual, where the revisions of growth are being very early on and very substantial in this program. n nAnd about access to markets, let’s wait for the staff report. You will see the strategy there spelled out. But clearly, the authorities are making progress to normalize the financing of the country in the near future. n nMS. ZIEGLER: Thank you, Rodrigo. We are going to take the final question; it’s going to be on Bolivia. n nQUESTIONER: Ahead of the election coming up this weekend, I wonder if you have had any contact with the teams of the candidates that have said already that they think that going to the IMF is going to be one of their options. And regardless of that, I want to know how fast the IMF can come in support of Bolivia if the next administration comes asking for help. n nMS. ZIEGLER: Nigel? n nMR. CHALK: Yeah. As you know, Bolivia is facing a very difficult situation as they go into this election. In terms of discussions with the candidates, yes, we have discussed with each of the candidates. We benefited from hearing their views on the challenges facing Bolivia and how they view the best way to restore stability and growth in the country. So that was very helpful to us to get that perspective from them. n nI would say that we’re encouraged that there seems to be a general societal consensus to change course on economic policy in Bolivia. I think that the sort of focus on stabilizing the economy and restoring a sort of balanced growth is important. We’re here. We’re ready to support. We can move quickly. n nThe Fund has a track record of moving quickly when needed. So, we’re ready and available when the candidates choose to talk to us in whatever capacity they see fit for the country, whether that be on technical advice on fund financing or anything else that we can help the country with. n nMS. ZIEGLER: Thank you. That brings this press conference to a close. Well, not yet. We’re going to have some closing comments from Rodrigo. So I will turn that over to you in the interest of time. Rodrigo? n nMR. VALDES: Yeah. No, I just want to say that this is my last press briefing with you with this hat.