Ecuador: GDP growth slows in Q3
GDP increased 5.6% in annual terms in the third quarter, below Q2’s 11.6% expansion, largely due to a less favorable base effect.
A marked deterioration in the external sector was largely behind Q3’s slowdown. Exports of goods and services contracted 0.1% in annual terms, contrasting the 14.2% growth logged in the previous period. Conversely, imports of goods and services posted another strong increase, rising 22.8% in Q3 (Q2: +27.3% yoy). As a result, the external sector once again contributed negatively to the headline reading, and to a greater extent than in the previous quarter.
On the domestic front, household consumption grew at a weaker, albeit still-strong, rate of 11.0% year-on-year in Q3, following the 14.8% growth tallied in the prior quarter. Similarly, capital spending largely held its ground, rising 7.8% in Q3, somewhat below Q2’s 8.7% increase. Meanwhile, public spending picked up pace, expanding 3.3% (Q2: +0.3% yoy) and logging the highest reading since Q2 2018.
Lastly, on a seasonally-adjusted quarter-on-quarter basis, economic growth slowed to 0.5%, following Q2’s 2.2% expansion.
Commenting on the outlook for growth, analysts at the EIU noted:
“In the third quarter the economy continued its recovery from the most acute phase of the pandemic in mid-2020. Overall performance was again slightly stronger than we had expected. […] The third-quarter data are likely to prompt us to push up our estimate for growth in 2021 and pull down our forecast for 2022, as more pent-up household spending is being released earlier than we had expected. However, the broad direction of the economy remains the same.”