IMF Acknowledges Progress On El Salvador Reforms, Cites Stronger Growth

El Salvador's Bitcoin bet just got a nod from the International Monetary Fund. The global financial watchdog, typically allergic to monetary experiments, has acknowledged the country's reform progress and pointed to stronger-than-expected growth. It's a quiet but significant shift in tone for an institution built on orthodox economics.

Reforms Under the Microscope

The IMF's latest report doesn't shy away from the challenges El Salvador faces—debt sustainability, fiscal pressures, the whole spreadsheet. But the language has softened. Where once there were warnings, now there's acknowledgment of 'progress.' The report cites stronger growth, a metric that's hard to argue with, even for skeptics of the Bitcoin Law.

A Sovereign Experiment Pays Dividends?

This isn't an endorsement of Bitcoin as legal tender. Let's be clear. The IMF still views the crypto move with deep suspicion. But the data is the data. Stronger growth suggests the country's broader reform agenda, which includes the controversial digital asset play, might be creating tangible economic momentum. It's a classic case of 'don't tell me, show me'—and for now, El Salvador is showing results that demand attention.

The real test will be sustainability. Can this growth outlast the hype cycles and volatility inherent in crypto markets? Traditional finance types are watching, ready with their 'I told you so's' at the first sign of trouble—because nothing makes a banker happier than being right about a risk, except maybe a risk-free fee.

IMF Notes Faster Growth

Reports note that growth is running above earlier forecasts. The IMF now sees real GDP growth NEAR 4% for 2025. Local data show the economy expanded 5.1% in the third quarter of 2025 compared with the same quarter a year earlier, led by construction and remittance-driven consumption.

Remittances and stronger investment flows were cited as key drivers. The fund said higher confidence and improved fiscal numbers have helped create space for short-term rebuilding of reserves.

Gradually, then suddenly. https://t.co/MWP0avqlDE pic.twitter.com/hYYONaRLcI

— Nayib Bukele (@nayibbukele) December 22, 2025

A Program Backed By Clear Conditions

Based on IMF releases, a staff-level agreement was reached with El Salvador in December 2024 for a program worth about $1.4 billion. That arrangement sets fiscal targets and governance measures meant to restore sustainability.

Earlier, when the IMF completed the first review and Article IV consultation in June 2025, a disbursement equivalent to roughly $118 million in SDRs was approved. Reports added that authorities have enacted a new fiscal law, strengthened public procurement transparency, and advanced governance measures for state firms.

An actuarial study on pensions has been published, and steps to tighten anti-money-laundering rules were discussed with IMF staff. The fund has also pressed for limits on public sector exposure to cryptocurrencies; according to international coverage, measures to reduce that exposure and to make private crypto use voluntary are under consideration.

According to IMF briefings, the second review will require follow-through on prior actions and the meeting of fiscal targets. Continued disbursements depend on progress, and IMF teams remain in contact with Salvadoran authorities to work through outstanding issues.

In parallel, the IMF has reiterated its position on El Salvador’s Bitcoin policy. According to recent IMF statements, the fund wants the country’s public sector Bitcoin holdings to remain capped, with no additional purchases made under the current loan program.

The IMF has also pushed for a reduced state role in crypto-related activities, including changes tied to the Chivo wallet, arguing that limits are needed to contain fiscal and financial risks. Salvadoran officials have said bitcoin remains part of their strategy, though IMF documents show no confirmed increase in government-held Bitcoin since early 2025.

Featured image from Unsplash, chart from TradingView