Ecuador Economic Forecast

Ecuador Economic Outlook

September 12, 2018

Although overall economic activity accelerated throughout the second quarter, oil production contracted in the first six months of the year and by a greater magnitude than seen in the same period in 2017. The drop reflects Ecuador’s oil agreement with OPEC to cut output. While exports decelerated in June, imports recorded a sharper fall, easing the external sector’s drag on growth. Private sector credit expanded at a more moderate pace in Q2, however, dropping to a 13-month low in June. While the government has taken steps towards achieving greater fiscal consolidation, increased financing constraints owing to a rapidly rising government debt load and growing interest rate burden prompted Fitch Ratings to downgrade Ecuador’s credit rating from B to B- on 17 August. In efforts to narrow the government spending gap, the country recently secured a USD 1.1 billion loan bundle, which includes a USD 500 million repurchase agreement with Goldman Sachs.

Ecuador Economic Growth

Growth this year will be supported by higher oil prices and robust investment in the oil sector. However, the economy is expected to decelerate in the short- to medium-term, owing to reduced oil output and in part due to the government’s austerity measures, which will likely restrain economic activity. Private credit growth will also likely moderate and dent the pace of expansion in private consumption. Met the why particular panelists project GDP growth slowing to 1.5% in 2018, unchanged from last month’s forecast, and 1.2% in 2019.

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)95.111299.398.6113
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 %)11.42.3-6.2-8.1-0.5
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 %Sep 24
Stock Market1,3940.17 %Sep 24

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