El Salvador will seek $ 1 billion to lift the economy

The Government of El Salvador announced on Thursday night an economic reactivation plan, with priority in micro and small companies, for close to 1,000 million dollars.

"We have worked together with the private sector on an approach of economic measures to alleviate the effects of the COVID-19 crisis," said Finance Minister Nelson Fuentes at a press conference accompanied by other officials and businessmen.

He noted that the package includes the creation of a loan portfolio for all the companies that "have suffered collateral damage from COVID-19 in their operations" in the amount of 360 million dollars.

US $ 100 million would also be used to finance the "informal sector" with a payment term of 3 years through a state commission for micro and small businesses.

The initiative, whose funds must be approved by congress deputies, also includes financial support for companies to pay 50% of their employees' wages.

Fuentes indicated that it also seeks to deliver a food package to 1.5 million families, which implies an outlay of $ 50 million a month "while the emergency lasts."


The head of the Ministry of Finance explained that the rescue package for the economy includes a series of fiscal measures so that private companies "can have liquidity" to face their costs.

These include the one-month extension for the presentation of the Income Tax (ISR) declaration, which was due on April 30, and the Payment on Account "as an important support" for entrepreneurs.

On the other hand, they will seek an amendment to the decree authorizing the search for funds for 2,000 million to attend the emergency so that the money delivered to the mayors may be used "for financial obligations" related to the payment of services and infrastructure.

He explained that "a plan for the agricultural sector is also being worked out, which will be presented in the short term" and is a "food security trust" to create nearly a million jobs.

"All this with the initiative that the economic circle continues and the economy can be energized once we get out of the crisis stage," Flores said.

The president of the National Association of Private Enterprise (ANEP), Luis Cardenal, said that this plan was built after three weeks of negotiations.

He detailed the reactivation of the economy "has to do with the fact of protecting ourselves from other diseases" such as a "crisis of unemployment, hunger, social disorders, including the increase in crime and delinquency."

If Congress approves this financing, the country would invest 3,000 million dollars in the attention of the pandemic, of which 2,000 are for health care and 1,000 to raise the economy.

The economist Ricardo Castaneda told Efe in early April that the country is "on the eve of one of the most serious crises in history" with a drop higher than that recorded during the 2009 world crisis.

The expert indicated that the same Central Reserve Bank (BCR) in its first estimates indicates that "the economy may fall up to 4% and if this continues the fall may be even greater, that is to say that the country may fall into an economic recession "

The first official estimates indicate that the country lost $ 281 million in ISR as a result of the pandemic, while the tourism sector is expected to stop receiving $ 440 million in foreign exchange.


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