Ecuador

Outlook remains stable despite default concerns

The outlook for growth this year remains stable and the country is expected to experience a mild recovery after likely having experienced its first contraction in a decade in 2009. The country is still coping with the consequences of the energy crisis caused by the drought which affected the country in November. The Ecuadorean government recently signed a letter of understanding with the Chinese government for a US$ 1.7 billion credit line to finance the construction of the country’s largest hydroelectric plant. Meanwhile, international credit rating agency Standard & Poor's warned of the possibility of a further default on the remaining stock of foreign debt, as the country is still struggling to finance its budget deficit. Following on the debt default in December 2008, the government lost access to international credit markets as a source of financing.