Ecuador Economic Forecast

Ecuador Economic Outlook

April 9, 2019

The economy rounded off 2018 with the weakest performance in two years in Q4. A continued deceleration in domestic demand, led by a dive in fixed investment growth amid tighter credit availability and lower business sentiment, led the slowdown. Turning to 2019, economic activity picked up slightly in January as oil production climbed. A continued moderation in private sector credit growth, however, likely constrained household spending and investment. Meanwhile, the IMF released details on the USD 4.2 billion extended fund facility, which will aim to improve the economy’s fiscal position by cutting public sector spending and raising revenue via a tax reform. On the political front, President Lenín Moreno announced Ecuador’s withdrawal from the Union of South American Nations (UNASUR) on 13 March, arguing that the organization has ceased to be an effective body for regional integration.

Ecuador Economic Growth

Growth is set to weaken this year, as austerity measures and tighter credit conditions weigh on domestic demand, underpinned by a plunge in government spending and a fall in private consumption growth weighed on by reduced household incomes. While the fiscal consolidation drive will likely impede activity in the near-term, it should help to address structural imbalances in the longer-term. FocusEconomics panelists project an expansion of 0.7% in 2019, which is down 0.1 percentage points from last month’s forecast, and 0.9% 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 %Apr 22
Stock Market1,3660.17 %Apr 22

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