Ecuador Economic Forecast

Ecuador Economic Outlook

November 8, 2016

On 21 October, President Rafael Correa signed a decree that will allow the government to continue running high fiscal deficits. The decree establishes that the current debt ceiling—set at 40% of GDP—will now apply to consolidated public sector debt rather than total public debt, which is much higher. The increased leeway is unlikely to bode well with investors, given Ecuador’s poor record in repaying debt. Extensive efforts to staunch the widening budget shortfall have proven fruitless so far as oil prices remain low and the costs of reconstruction following April’s earthquake are weighing on the state’s coffers. Although Q1’s drop in GDP moderated in Q2, dismal economic activity in the two first months of Q3 and doubts over OPEC’s ability to firm up oil prices suggest that the country’s economic woes are far from abating.

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 Market1,0420.0 %Dec 02

Ecuador Economic Growth

November 8, 2016

Economic prospects remain bleak as a strong U.S. dollar is dragging on exports and unsupportive fiscal policies are constraining household spending, while President Correa’s decree risks the country’s creditworthiness. Nonetheless, our panelists see GDP contracting 2.3% this year, which is up 0.3 percentage points from last month’s forecast. Panelists expect the economy to record a softer decline of 0.1% in 2017.

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