WASHINGTON -- The International Monetary Fund said Tuesday it welcomes the decision by Ecuadorian President Lenín Moreno to cancel an austerity package following more than a week of protests.
Gita Gopinath, IMF's chief economist, said the agency welcomes the attempt "to bring in all stakeholders and to make decisions about macro reforms taking into account the various communities that are going to be affected by it."
Moreno and leaders of Ecuador's indigenous groups struck a deal late Sunday to cancel an IMF-backed package that included a sharp rise in fuel prices after protests that left seven people dead and 1,152 arrested.
Gopinath did not address the status of the $4.2 billion loan Ecuador received in March during a press conference kicking off the annual meeting.
Asked whether the image of the IMF has suffered after the outcome in Ecuador and also in Argentina —where left-leaning Alberto Fernández is favored to get elected this month over objections to a $57 billion loan President Mauricio Macri got from the IMF last year— Gopinath said the organism must operate in difficult circumstances.
"The IMF goes into these countries when they are in stressful times," she said. "It is unfortunate that these are the difficulties that people have to face."
In its World Economic Outlook released Tuesday, the Fund forecasts that Ecuador economy would contract by 0.5% this year after growing 1.4% in 2018. The projection, made before the protests, was that its economy would expand 0.5% in 2020.
Ecuador joins Argentina, Barbados, Nicaragua and Venezuela as the only countries in the hemisphere projected to have negative growth in 2019.
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