Ecuador Economic Forecast

Ecuador Economic Outlook

February 12, 2019

Economic activity appears to have weakened last year on a downturn in domestic demand. A slowdown in remittance inflows, moderating credit growth and the return of inflation likely weighed on private consumption in the second half of the year, while fiscal austerity measures have curbed government spending. Liquidity problems, arising from the scarcity of additional funds needed to finance the weighty external debt and this year’s nearly USD 8 billion budget, prompted the country to issue USD 1 billion in 10-year government bonds at the end of January. The debt sale, which offered one of the highest yields since the financial crisis, surprised investors as the Andean nation has yet to complete talks with the IMF over a possible support program. The country is seeking to reconcile President Lenín Moreno’s “prosperity plan” with a clear commitment to balancing the books in order to strike a deal with the IMF.

Ecuador Economic Growth

Momentum is expected to wane again in 2019, with the FocusEconomics panel projecting an expansion of 0.8% in 2019, which is down 0.1 percentage points from last month’s forecast. The government’s austerity plan and shortage of funds will likely impact private consumption through the reduced availability of credit, while tighter global financial conditions weigh on overall economic activity. Downside risks stem from uncertainty over the sources of financing, especially the failure to secure an IMF deal, which could panic investors. The panel sees GDP growth edging up to 1.2% in 2020.

Ecuador Economy Data

20132014201520162017
Population (million)15.816.016.316.516.8
GDP per capita (USD)6,0306,3476,0995,9666,143
GDP (USD bn)95.110299.398.6103
Economic Growth (GDP, annual variation in %)5.03.80.1-1.63.0
Consumption (annual variation in %)5.13.50.3-3.34.7
Investment (annual variation in %)10.42.3-6.2-8.1-0.5
Industrial Production (annual variation in %)6.23.7-0.4-2.52.1
Unemployment Rate4.04.34.35.4-  
Fiscal Balance (% of GDP)-9.9-9.6-6.2-7.4-5.4
Public Debt (% of GDP)24.029.633.038.745.2
Inflation Rate (CPI, annual variation in %, eop)2.73.73.41.1-0.2
Inflation Rate (CPI, annual variation in %)2.73.64.01.70.4
Inflation (PPI, annual variation in %)-  -  -  -  -  
Benchmark Interest Rate (%)4.535.185.145.124.95
Current Account (% of GDP)-1.0-0.5-2.11.5-0.3
Current Account Balance (USD bn)-0.9-0.5-2.11.4-0.3
Trade Balance (USD billion)-0.9-2.0-3.20.5-0.9
Exports (USD billion)24.825.718.316.819.1
Imports (USD billion)25.827.721.516.320.0
Exports (annual variation in %)4.63.5-28.7-8.413.8
Imports (annual variation in %)6.57.6-22.4-24.122.6
International Reserves (USD)4.44.02.54.32.5
External Debt (% of GDP)19.623.627.634.138.2

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Ecuador Facts

ValueChangeDate
Exchange Rate25,0000.0 %Feb 14
Stock Market1,4280.17 %Feb 14

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