Consumption in Ecuador
Ecuador - Consumption
GDP drops at milder pace in Q1
The decline in economic activity moderated again in the opening quarter of the year, with GDP falling 5.6% year-on-year (Q4 2020: -7.2% yoy). That said, the drop was still pronounced and marked the sixth successive quarter of shrinking output.
The first quarter’s milder contraction was largely attributed to an improvement in domestic demand: Household consumption slid at a softer rate of 3.0% in annual terms in Q1, following the 6.8% decline tallied in the prior quarter. Similarly, the fall in fixed investment also moderated, with Q1 seeing the softest contraction in a year (Q1: -6.3% yoy; Q4 2020: -11.5% yoy). Meanwhile, government consumption tumbled at a sharper rate of 8.5%, following Q4 2020’s 6.7% drop.
On the external front, exports of goods and services swung back to contraction, sliding 3.0% on an annual basis and contrasting Q4 2020’s 2.9% expansion. That said, imports of goods and services rebounded, growing 2.0% (Q4 2020: -0.3% yoy) and further highlighting firming domestic activity. As a result, the external sector weighed on the headline reading, contrasting the prior’s quarter positive contribution.
Lastly, on a seasonally-adjusted quarter-on-quarter basis, economic activity grew 0.7% in Q1, marginally above the 0.6% expansion logged in the previous quarter.
This year, GDP is seen returning to growth, particularly in the second half of the year, as the relaxation of Covid-19 restrictions midway through Q2 should be releasing pent-up demand and bolstering domestic activity. Moreover, higher average prices for oil—the country’s key export—and the reopening of economies globally should support the external sector. That said, the country’s still-low vaccination rate, coupled with the emergence of new Covid-19 variants, poses a key downside risk.
Analysts at EIU, said:
“We expect real GDP to recover only modestly in 2021, expanding by just 2%, reflecting weak sequential growth over the year, as well as negative base effects. A recovery in private consumption will be restrained by a lack of fiscal support for consumers amid the Covid-19 crisis and a slow improvement in labour market conditions.”
LatinFocus Consensus Forecast panelists project GDP to grow 3.2% in 2021. For 2022, the panel sees GDP expanding 2.5%.
Ecuador - Consumption Data
|Consumption (annual variation in %)||0.3||-2.0||3.6||2.4||0.7|
5 years of economic forecasts for more than 30 economic indicators.
Ecuador Consumption Chart
Source: Central Bank of Ecuador and FocusEconomics calculations.
|Exchange Rate||25,000||0.0 %||Dec 31|
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September 6, 2021
Consumer prices rose 0.12% over the previous month in August, cooling from July’s 0.53% increase.
August 12, 2021
Economic activity grew 15.9% in annual terms in June, easing from May’s 29.0% surge, largely due to a less favorable base effect.
August 5, 2021
Consumer prices rose 0.53% over the previous month in July, contrasting June’s 0.18% slide and marking the highest print in over a year.
July 15, 2021
Economic activity grew 29.0% in annual terms in May, but eased from April’s 56.1% jump, largely due to a less favorable base effect.
July 7, 2021
Consumer prices slid 0.18% over the previous month in June, contrasting May´s 0.08% increase and falling for the first time since December last year.