The post IMF Updates El Salvador EFF Review With Bitcoin Concerns appeared on BitcoinEthereumNews.com. IMF projects 4% GDP growth for El Salvador, exceeding theThe post IMF Updates El Salvador EFF Review With Bitcoin Concerns appeared on BitcoinEthereumNews.com. IMF projects 4% GDP growth for El Salvador, exceeding the

IMF Updates El Salvador EFF Review With Bitcoin Concerns

  • IMF projects 4% GDP growth for El Salvador, exceeding the earlier 2.5% forecast estimate.
  • 2025 primary balance target on track, 2026 budget approved with deficit reduction.
  • Chivo wallet sale negotiations advanced, Bitcoin project discussions continue.

International Monetary Fund Mission Chief Mr. Torres issued a statement on December 22, 2025, following discussions with Salvadoran authorities regarding the second review of the 40-month Extended Fund Facility arrangement. The statement addressed economic performance, fiscal targets, and ongoing negotiations around cryptocurrency infrastructure.

El Salvador’s economy is expanding faster than anticipated based on improved confidence, record remittances, and investment activity. Real GDP growth is projected to reach approximately 4% this year, with favorable prospects for 2026. This outperforms the IMF’s October 2025 projection of 2.5% growth.

Fiscal Consolidation Targets Remain On Track

The authorities maintain a commitment to fiscal consolidation, with the 2025 primary balance target on track to be met. The recently approved 2026 budget aligns with further deficit reduction alongside social spending expansion. These efforts support reserve accumulation and domestic borrowing reduction in line with program targets.

The structural reform agenda is advancing across multiple areas. An actuarial pension study was published to support projected consolidation alongside a medium-term fiscal framework. Financial stability reforms strengthen the legal framework for bank resolution, crisis management, and deposit insurance schemes. Basel III regulations were adopted to enhance liquidity coverage and net stable funding requirements.

The Legislative Assembly approved a new AML/CFT law aligning the legal framework with international best practices. This addresses previous concerns about El Salvador’s compliance with global financial transparency standards.

Negotiations for the sale of the government e-wallet Chivo are well advanced, according to the statement. Discussions regarding the Bitcoin project continue centered on enhancing transparency, safeguarding public resources, and mitigating risks. This remains a contentious element of the second review process.

El Salvador’s Commitment Regarding Bitcoin Acceptance

Under the original EFF agreement reached in December 2024, El Salvador committed to making Bitcoin acceptance voluntary for the private sector and gradually reducing public sector participation in Bitcoin-related activities. The Chivo wallet is a primary vehicle for government cryptocurrency operations.

Reports indicate El Salvador acquired approximately 1,098 BTC during December 2025 despite commitments to wind down public sector Bitcoin involvement. The precise terms of the Chivo sale continue under negotiation between Salvadoran authorities and IMF staff.

Torres stated that close engagement with authorities is expected to continue with the objective of reaching a staff-level agreement on all policies and reforms needed to complete the second review of the EFF program.

Related: VanEck Flags Rising Bitcoin Volatility and Cooling On-Chain Data

Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.

Source: https://coinedition.com/imf-confirms-fiscal-targets-on-track-as-el-salvador-advances-reforms/

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