The President’s initiative without issuing debt for current expenses will imply a reduction of expenses in all State institutions, and a possible agreement with the International Monetary Fund (IMF), parliamentarian Marcela Villatoro said.
“The most certain thing is that, if they are negotiating an agreement with the IMF, one of the demands must be a fiscal adjustment of public expenditure and this implies a total reduction of the current expenditure budget,” she stated.
In practice, she stressed, this means cutting spending in all state institutions.
On September 15, Bukele announced that he will present before the Legislative Assembly the first fully funded budget. Without the need to issue a single cent of debt for current spending.
“El Salvador will no longer spend more than it produces annually. We will not even borrow money to pay interest on the debt we inherited, and even that, we will pay from our own production”, the President pointed out.
The government is currently negotiating with the IMF a loan for 1,300 million dollars and among the demands of the financial entity is a fiscal adjustment equivalent to three percent of the Gross Domestic Product (GDP).
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