The International Monetary Fund has said that Ecuador's reform efforts are not enough to secure a fresh loan.

The Latin American country has passed a new fiscal reform bill in an effort to tap $240m of fresh funds.

The recent changes to the bill were not enough to be acceptable to the fund, said the IMF's Western Hemisphere Director, Claudio Loser, in a letter.

The fiscal bill aims to limit public spending and create an oil stabilization fund, two IMF preconditions for new funds.

"Unfortunately, neither the version passed by Congress, not the version including the president's veto, responds to the fiscal and institutional criteria," said Mr Loser.

Oil hopes

Ecuador posted the strongest economic growth in Latin America last year, and is expected to expand by a further 4% in 2002.

That is a far cry from a 7.3% decline in 1999 when the government defaulted on part of its international debt.

The country is expecting a new crude oil pipeline project due for completion in 2003 to greatly increase oil revenues and wean the country off IMF aid.