The Monetary Fund stressed that the preliminary draft budget includes a reduction in wage bills and expenditure on goods.
The International Monetary Fund (IMF) considered that the preliminary draft of the general budget of the nation is a step in strengthening public finances, but warned that it requires a “firm” implementation.
What I can say is that the recently presented 2025 budget represents a step in strengthening public finances, said Julie Kozack, IMF Communications Director, a press conference on Thursday.
He added that the draft budget includes measures to contain wage bills and expenditure on goods and services; however, it will have to be accompanied by firm implementation in the future.
On the edge of the legal limit, the Ministry of Finance handed over the $9,663 million on September 30, proposed by the government as the first budget in decades that does not include debt to cover current spending bonds.
This preliminary draft provides for a cut of 11,115 places that will result in savings, according to Treasury estimates, of more than $176.8 million. Hacienda has also pointed out that for next year wage increases and levels are suspended, new places are prohibited and scales frozen in the health and education sector.
As part of the revisions to Article IV, the Monetary Fund has on several occasions recommended to the Salvadoran government to contain wage expenditure through derogations from special wage indexation mechanisms and civil service reforms that prioritize the performance of public employment.
Despite the cut in the wage mass, again the biggest spending for the government in 2025 will be debt service, which will require $2,784.66 million, 28.8 percent of the overall budget.
The allocation for bonds arising from the public debt exceeds the budget for the education sector, expected to be $1,535.78 million by 2025, as well as the $1,170.38 million provided for Health.
This article has been translated after first appearing in Diario El Mundo