Ecuador Economic Forecast

Ecuador Economic Outlook

April 19, 2016

Ecuador’s economy has been hard hit by the oil price collapse and barely grew last year. The consequences of the oil price drop have been exacerbated by the fact that the dollarized economy cannot adjust to external challenges via currency movement, thus putting pressure on wages and domestic demand. GDP expanded just 0.3% in 2015—the lowest reading in 16 years—as exports decelerated severely, fixed investment deteriorated and both public and private consumption growth slowed notably. Quarterly data show that the contraction deepened in Q4. As fiscal revenues are falling in tandem with oil prices, the government announced additional spending cuts in February. Moreover, Parliament is currently discussing a tax reform that increases several taxes, including taxes on tobacco as well as alcoholic and sugary drinks, in order to lift revenues. Meanwhile, on 16 April, Ecuador was struck by a devastating 7.8 magnitude earthquake in which hundreds of people died and thousands were injured. This was the most devastating earthquake to hit the country in 40 years and the total cost of rescue and cleanup efforts remains to be seen.

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 Market1,1270.09 %Apr 26

Ecuador Economic Growth

April 19, 2016

The economy will likely take a turn for worse and fall intro contraction this year, as consumption and fixed investment will deteriorate due to the adverse implications of low oil prices on the domestic economy. The contraction in exports, nevertheless, is projected to soften notably. Panelists participating in the LatinFocus Consensus Forecast expect GDP to decrease 2.1% in 2016, which is down 0.4 percentage points from last month’s forecast. Panelists see the economy returning to growth in 2017 and recording a 0.9% expansion.

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