IMF Mission Chief Mr. Torres announced the update following months of in-person and virtual meetings. According to him, the parties are moving toward a staff-level agreement under the 40-month EFF arrangement. The IMF confirmed that consultations will continue, with the goal of agreeing on the full set of policies and reforms required to complete the second program review.
IMF Notes Faster Growth and Budget Progress
According to the IMF, El Salvador’s economy is expanding faster than expected. Growth is supported by improved confidence, resilient remittance inflows, and higher investment activity. The Fund projects real GDP growth of around 4% this year and sees favorable prospects for economic expansion next year.
The IMF also highlighted the authorities’ commitment to fiscal consolidation. The end-2025 primary balance target remains on track under the program. The approved 2026 budget aligns with IMF benchmarks, reducing the fiscal deficit while expanding social spending.
These measures, the IMF noted, support reserve accumulation and reduce domestic borrowing in line with program commitments. Progress has also been recorded on the structural reform agenda, with several policy actions already implemented or formally approved.
Pensions, Banks, and AML: Structural Reforms Under the Program
The authorities published an actuarial study of the pension system aimed at strengthening its long-term sustainability and released a Medium-Term Fiscal Framework. In the area of financial stability, reforms advanced through new legislation that strengthens bank resolution mechanisms, crisis management tools, and deposit insurance systems.
El Salvador has adopted Basel III standards to improve liquidity and funding resilience. According to the IMF, these steps enhance the overall stability of the banking system. In addition, parliament approved an updated AML/CFT law (anti-money laundering and counter-terrorism financing), which the Fund said brings the framework closer to international standards.
Chivo and Bitcoin: Talks Continue With Focus on Risk and Transparency
The IMF confirmed that negotiations on the sale of the state-run Chivo e-wallet have progressed, with discussions focusing on the practical aspects of the transition. At the same time, consultations on the Bitcoin project are ongoing, with an emphasis on transparency, protection of public resources, and risk mitigation.
The Fund has long highlighted risks related to Bitcoin’s volatility and potential fiscal exposure, and these concerns remain part of the dialogue. After Bitcoin was adopted as legal tender, El Salvador began accumulating BTC, a strategy that has repeatedly drawn critical assessments from the IMF.
According to the IMF, El Salvador has met several key program commitments and is moving toward a full phase-out of Chivo. However, uncertainty remains regarding the actual status of further Bitcoin accumulation, as public statements and IMF assessments diverge.
How Much Bitcoin Does El Salvador Hold? Conflicting Views
El Salvador’s Bitcoin Office recently claimed that daily purchases continue and reported total holdings of 7,509 BTC as of December 22. Officials attributed the increase to an ongoing “one BTC per day” strategy.
In contrast, a November IMF report presented a different view, stating that the country is not accumulating new Bitcoin. According to the Fund, reported increases reflect wallet consolidation and transfers between government-owned addresses.
What Comes Next
Negotiations will continue as discussions move toward a staff-level agreement. The IMF said it will maintain close coordination with Salvadoran authorities. The outcome of the talks will determine whether the second EFF review is completed and which reform parameters become final. Further updates are expected as negotiations progress.