Ecuador: GDP contraction moderates in Q4
March 31, 2021
Economic activity contracted at a milder pace of 7.2% in annual terms in the final quarter of 2020, following Q3’s 9.1% tumble. Nonetheless, the drop remained pronounced and marked the sixth successive quarter of contracting output. All in all, GDP plunged 7.8% in 2020, contrasting 2019’s flat reading and logging the worst contraction in more than two decades.
The fourth quarter’s more moderate decline was broad-based. The drop in consumer spending softened to 6.7% in year-on-year terms, following the 8.9% fall tallied in the previous quarter. Similarly, fixed investment slid at a weaker rate of 11.6% (Q3: -15.2% yoy) and government consumption contracted 6.8%, easing from Q3’s 7.5% dive.
On the external front, exports of goods and services picked up pace, expanding 2.9% year-on-year (Q3: +0.2% yoy) and logging the best reading since Q1 2020. Meanwhile, imports dropped again but they did so at a notably softer pace than in the prior quarter (Q4: -0.3% yoy; Q3: -11.9% yoy).
Lastly, on a seasonally-adjusted quarter-on-quarter basis, economic activity expanded 0.6% in Q4, losing notable steam from Q3’s 4.6% growth.
This year, the economy is seen recovering from 2020’s dual shock of the health crisis and collapsing oil prices, with solid growth expected on the back of recovering foreign and domestic demand. However, the uncertain course of the pandemic and the slow vaccine rollout compared to regional peers cloud the outlook.