Ecuador Economic Forecast

Ecuador Economic Outlook

August 9, 2016

Ecuador’s oil-exporting economy took a turn for worse in Q1 when its GDP contracted a record 3.0% annually (Q4: -1.2% year-on-year). The ongoing deterioration mainly reflects the far-reaching consequences of the low-oil-price environment on Ecuador’s dollarized economy, which cannot adjust to the depressed prices of its key exports via a currency devaluation, therefore putting a strain on wages and public spending. All components of domestic demand deteriorated in Q1, while the external sector still contributed positively to overall growth. Data for Q2 are grim: economic activity dropped drastically in April, dragged down by April’s devastating earthquake, and continued to fall in May, albeit at a much softer pace. In order to meet its large financing needs, which have risen due to the damage caused by the earthquake, the government issued USD 1.0 billion in five-year bonds in July at a yield of 10.75%, the highest since 2000.

Ecuador Economy Data

20112012201320142015
Population (million)15.315.515.816.016.3
GDP per capita (USD)5,1935,6656,0086,2976,078
GDP (USD bn)79.387.994.810198.9
Economic Growth (GDP, annual variation in %)7.95.64.63.70.3
Consumption (annual variation in %)5.74.34.23.50.3
Investment (annual variation in %)14.310.610.75.3-2.5
Industrial Production (annual variation in %)5.83.45.63.01.6
Unemployment Rate6.04.94.75.15.4
Fiscal Balance (% of GDP)-0.1-0.9-4.6-5.3-5.3
Public Debt (% of GDP)18.421.224.129.933.1
Inflation Rate (CPI, annual variation in %, eop)5.44.22.73.73.4
Inflation Rate (CPI, annual variation in %)4.55.12.73.64.0
Inflation (PPI, annual variation in %)12.5-3.43.8-19.1-12.9
Benchmark Interest Rate (%)4.534.534.535.185.14
Current Account (% of GDP)-0.5-0.2-1.0-0.6-2.2
Current Account Balance (USD bn)-0.4-0.2-0.9-0.6-2.2
Trade Balance (USD billion)-2.1-1.7-0.6-2.0-3.2
Exports (USD billion)22.323.824.825.718.3
Imports (USD billion)24.425.525.527.721.5
Exports (annual variation in %)27.66.54.63.5-28.7
Imports (annual variation in %)18.74.30.08.8-22.4
International Reserves (USD)3.02.54.44.02.5
External Debt (% of GDP)19.418.219.824.1-  

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Ecuador Facts

ValueChangeDate
Stock Market1,0340.0 %Aug 03

Ecuador Economic Growth

August 9, 2016

In this climate, Ecuador’s economy is forecast to slip into a deep recession. Our panelists see GDP contracting 3.2% this year, which is down 0.3 percentage points from last month’s forecast. Panelists expect the economy to record a smaller decline of 0.2% in 2017.

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