Asunción: President Santiago Peña has requested a loan of $400 million from the International Monetary Fund (IMF) to address the risks of climate change and finance public works in the regions most affected by droughts and at the same time floods.
Although the IMF is still assessing Paraguay’s compliance with structural reforms, the application is already in progress and the government is confident it will receive the green light in the second half of 2024.
“President Peña and Minister (Carlos Fernández) Valdovinos led the negotiations. The Instrument for Policy Coordination (PCI) had a number of commitments but no disbursements to fulfill them. This program is a supplement to that. We have a number of reforms and the economic incentive to implement them. Of course, the program must pass Congress to be disbursed because the financial conditions are very favorable,” explained Carlos Javier Charotti, Deputy Minister of Economy.
The deputy economy minister was referring to the PCI, a technical assistance agreement to accelerate structural reforms while maintaining growth and macroeconomic stability. The agreement was concluded in November 2022 under the government of Mario Abdo Benítez and is intended to guarantee support to Paraguay for a period of two years.
The Instrument for Policy Coordination (PCI) had a number of commitments but no disbursements. This program is a supplement to that. We have a number of reforms and the financial incentive to implement them.
The $400 million corresponds to the funds of the Resilience and Sustainability Facility (SRS), a type of long-term financing to mitigate the effects of global warming, which the IMF released after the approval of the reforms agreed between Paraguay and the organization.
The deputy finance minister acknowledged that the president could use the loan to pay off the accumulated debts of the health and construction ministries. “This amount can be used to manage liabilities. If Congress approves this facility granted by the IMF because the financial conditions are very favorable, it can also be used to exchange debt for this new loan,” he emphasized. The loan has a grace period of 10 years and a term of 20 years at variable interest rates.
Charotti defended that the long-term changes are consistent with the growth forecast by the Ministry of Economy for 2024, estimated at 5 to 6%. This program provides that when these reforms are implemented, you will have the opportunity to take out this loan. If you took on 5% debt five years ago, you can now take on that debt at 2%. All these reforms enable you to achieve long-term and sustainable growth,” he said.
Weekly paper / LPO / ADN
The purpose of this service is to increase the value of the news and to establish a more fluid contact with readers. Comments should be adapted to the subject of the article. Commenters are solely responsible for the content, which should be factual and clear. Foul words, personal insults and racism will not be tolerated.
2023-11-11 03:09:10
#IMF #asked #funds #enable #reforms #adapt #climate #change #Weekly #newspaper
