GDP in Ecuador
Ecuador - GDP
Economy slows markedly in Q1 amid drive to strengthen fiscal metrics
Ecuador’s economic recovery lost considerable ground in the first quarter, with the economy growing at a substantially weaker pace compared to the preceding quarter: Annual GDP growth slowed to 1.9% in Q1, down from 3.0% in Q4. Moreover, in quarter-on-quarter terms, the economy contracted 0.7% in the first quarter, contrasting a 1.2% expansion in the previous quarter. A marked slowdown in the domestic economy and a deterioration in the external sector were behind the downturn.
Looking at a breakdown of the figures, domestic demand lost steam, growing at an annual pace of 3.9% in the first quarter compared to 4.8% in the previous quarter. Government consumption slowed notably (Q1: +1.3% year-on-year; Q4: +4.3% yoy), owing to the administration’s plans to cut back on public spending with a view to strengthening fiscal consolidation. Household consumption also rose at a more moderate stride, rising 4.6% in Q1 compared to 5.6% in Q4. On the upside, fixed investment growth shot up to 5.5% in Q1, mainly thanks to a double-digit surge in machinery, equipment and electrical appliances, following a 1.4% expansion in the previous quarter.
While exports made some gains from the previous quarter, the external sector continued to drag on growth as imports shot up. Exports grew 1.1% in Q1, following a milder 0.4% expansion in Q4. On the other hand, imports surged 8.4% in Q1, marking a notable climb from the 6.9% rise in Q4. Thus, the external sector deducted from growth as imports raced ahead of exports.
While higher oil prices should continue to support the recovery, growth is expected to lose ground from last year due to the impact on activity from President Lenín Moreno’s long-awaited program of economic adjustment aimed at fiscal consolidation. Moreover, the plan envisages a wider role for the private sector in the infrastructure, oil, energy, mining and telecoms sectors through public-private partnerships, which is hoped will generate USD 7 billion investment by 2021 and raise USD 1.6 billion for the public purse. A high level of indebtedness poses risks to the economy’s financial stability. The economy is heavily reliant on external borrowing to service its big debt burden; much of it is owed to China through loans-for-oil deals. This, combined with fewer import controls, has been draining international reserves and could prevent a speedier and sustainable recovery.
Panelists participating in the LatinFocus Consensus Forecast expect the economy to grow 1.7% in 2018, which is unchanged from last month’s projection. For 2019, the panel sees growth falling to 1.4%.
Ecuador - GDP Data
|Economic Growth (GDP, annual variation in %)||5.0||3.8||0.1||-1.6||3.0|
5 years of economic forecasts for more than 30 economic indicators.
Ecuador GDP Chart
Source: Central Bank of Ecuador and Met the why particular calculations.
|Exchange Rate||25,000||0.0 %||Aug 07|
|Stock Market||1,325||0.17 %||Aug 07|
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August 6, 2018
Consumer prices came in flat over the previous month in July, contrasting a 0.27% month-on-month decline in June.
July 18, 2018
According to the monthly economic activity indicator (IDEAC, Indice de Actividad Económica Coyuntural) released by the Central Bank of Ecuador, economic activity increased 3.8% over the same month of the previous year in May, marking a faster expansion than the revised 2.6% year-on-year rise in April (previously reported: +1.7% year-on-year).
July 6, 2018
Consumer prices declined 0.27% over the previous month in June, marking a bigger drop than the revised 0.18% month-on-month fall in May.
July 3, 2018
Ecuador’s economic recovery lost considerable ground in the first quarter, with the economy growing at a substantially weaker pace compared to the preceding quarter: Annual GDP growth slowed to 1.9% in Q1, down from 3.0% in Q4.
June 15, 2018
According to the monthly economic activity indicator (IDEAC, Indice de Actividad Económica Coyuntural) released by the Central Bank of Ecuador, economic activity rose 1.7% over the same month of the previous year in April, marking a bigger increase than the revised 0.8% year-on-year upturn in March (previously reported: +1.1% year-on-year).