Ecuador Economic Forecast

Ecuador Economic Outlook

October 9, 2018

Recently-released GDP data showed that the economy lost pace again in the second quarter, growing at the weakest pace in a year and a half, as the government’s fiscal consolidation efforts gained strength. Preliminary data for the first six months revealed that a fall in new spending, along with reduced costs in recurrent spending, have led to notable fiscal tightening over this time frame. A significant dependence on external financing makes the dollarized economy especially vulnerable to tighter global financial conditions and raises increasing concerns over the sources of debt financing for the Andean nation. Despite the challenges facing the economy, the appointment of business-friendly Richard Martinez as economy and finance minister in May has helped lift economic sentiment. Available data points to an acceleration in growth at the outset of Q3: Economic activity grew at a swifter pace in July, reflecting a surge in oil production compared to the previous month. However, while still in double digits, private credit growth continued to deteriorate, tumbling to a 14-month low in the same month.

Ecuador Economic Growth

The economy is expected to lose ground this year and next, owing to the government’s fiscal tightening plans and reduced oil production, which will likely dent overall economic activity. Austerity is likely to weigh on the economy in the short- to medium-term. Private consumption growth is also expected to lose pace, likely owing to moderating private credit growth. FocusEconomics panelists project GDP growth slowing to 1.3% in 2018 and 1.2% in 2019, which is unchanged from last month’s forecast.

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 %)3.1-0.71.71.3-  
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 %Oct 12
Stock Market1,3930.17 %Oct 12

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