Ecuador: Economy picks up in third quarter
December 31, 2010
In the third quarter, GDP expanded 4.3% over the same period last year. The expansion came in above the 2.7% increase recorded in the second quarter and exceeded last month's LatinFocus Consensus Forecast, which had anticipated the economy would expand 2.4%. The third quarter growth marked the fastest pace since the third quarter of 2008. The acceleration over the previous quarter was due to an improvement in domestic demand, while the external sector deteriorated slightly compared to the previous period. Total consumption expanded 7.9%, up from the 7.3% increase recorded in the previous quarter, while gross fixed investment jumped from a 10.1% rise in the second quarter to a 14.2% increase in the third quarter. Meanwhile, as imports outpaced exports, the net contribution from the external sector to overall growth dropped slightly. Exports of goods and services expanded 5.7%, up from the 5.0% increase recorded in the previous quarter, while imports rose 23.5%, up from the 22.3% increase in the second quarter. As a result, the net contribution from the external sector to overall economic growth deteriorated from minus 7.4 percentage points in the second quarter to minus 7.9 percentage points. At the sector level, the acceleration over the previous quarter was broad-based, as two of the three main sectors improved compared to the previous quarter. Industry rose 2.8%, contrasting the 0.7% drop recorded in the second quarter, while services added 5.3%, gaining on the 4.8% increase recorded in the previous quarter. Finally, agriculture dropped 0.8% in the third quarter, contrasting the 0.4% rise recorded in the second quarter. A quarter-on-quarter comparison does not corroborate the acceleration seen in the annual figures, as the economy expanded a seasonally adjusted 1.60% over the previous quarter, down from the 1.87% increase recorded in the second quarter.
Author: Armando Ciccarelli, Head of Data Solutions