source: Banco Central del Ecuador. [55], In 2009, economic growth declined to 0.6% during the global recession, accompanied by falling oil prices and a decline in remittances provided by Ecuadorians living and working abroad (a major source of external revenues). [63] Poverty rates were higher for indigenous peoples, Afro-descendants and rural areas, reaching 44% of the Native ancestry population. Economy Profile of Ecuador Doing Business 2020 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality control and safety In February 2019, Moreno secured loan deals worth USD 10.2 billion. [citation needed] Minor industrial activity is also concentrated in Cuenca. All Rights Reserved. Its overall score has increased by 4.4 points due to significant improvements in the fiscal health and government integrity scores. President Lenín Moreno was narrowly elected to a four-year term in 2017, succeeding former two-term President Rafael Correa. [64] A 500 kV transmission line increases national grid strength and electricity trade with Peru and Colombia.[66]. May 20, 2019 Ecuador: An Overview Political and Economic Situation Ecuador is a small, ethnically diverse country of 16.5 million inhabitants located in South America between Colombia and Peru. An estimated 9 million Ecuadorians have an economic occupation and about 1.01 million inhabitants are in unemployment condition. The OCP will double Ecuador's oil transport capacity. More than 20 percent of the population still lives below the poverty line. Ecuador's economy ended two years of growth and contracted slightly in 2019 due to a national strike that paralyzed the Andean country for two weeks in … An estimated 2 to 3 million Ecuadorians live abroad, but increased unemployment in key receiving countries - Spain, the United States, and Italy - is slowing emigration and increasing the likelihood of returnees to Ecuador. Given that the incumbent president, Lenín Moreno, is not seeking re-election and that a member of his party stands little chance of winning, there will be a new government in May 2021 after the February polls. Ecuador’s economic output stagnated in 2015 and fell by 1.2 percent in 2016 according to ECLAC figures. [28] This arrangement would provide support ($10 billion) for the Ecuadorian government’s economic policies over three years (2018-2021 Prosperity Plan).[28][57]. (212) 419-8286 The number of nonperforming loans has been increasing. The average applied tariff rate is 7.0 percent, and 281 nontariff measures are in force. [58] [47] In January 2009, the Central Bank of Ecuador (BCE) put the 2010 growth forecast at 6.88%. [37] The oil trade balance positive had revenues of $3.295 million in 2008, while non-oil was negative amounting to 2.842 million dollars. [56] In 2016, Ecuador’s gross domestic product contracted by 1.6%. May 8, 2020 The business environment remained below the regional average in 2020, with Ecuador ranked 129th out of 190, down from 2019. [41][42][43] In April 2007, Ecuador paid off its debt to the IMF thus ending an era of interventionism of the Agency in the country. LATIN AMERICAN ECONOMIC OUTLOOK 2019 COUNTRY NOTES ECUADOR Recent trends Ecuador has made progress in some development indicators in the past decades. The annual GDP growth was projected at 0.3% in 2015 which was significantly lower than 2014 (3.7%). Investor protection, default resolution and corporate taxation are all areas where progress is expected. Ecuador's economy is the eighth largest in Latin America and experienced an average growth of 4.6% per year between 2000 and 2006. a funding and technical assistance program to support the country’s development and growth efforts. Industry includes mining, manufacturing, energy production, and construction. [54], On December 12, 2008 President Rafael Correa announced that Ecuador would not pay $30.6m in interest to lenders of a $510m loan, claiming that they were monsters. Gasoline prices have already increased from $1.85 to about $2.40 … [citation needed] The trade balance with the United States, Chile, the European Union, Bolivia, Peru, Brazil and Mexico is positive. 10 Oct 2019 Quito, Ecuador ... which he claimed distorted the economy and cost the country $60bn. The statistic shows the growth in real GDP in Ecuador from 2009 to 2019, with projections up until 2021. FILE PHOTO: Ecuador's President Lenin Moreno Garces addresses the 74th session of the United Nations General Assembly at U.N. headquarters in New York City, New York, U.S., September 25, 2019. In 1999/2000, Ecuador's economy suffered from a banking crisis that lead to some reforms, including adoption of the US dollar as legal tender. The damage to Ecuador’s social and political fabric is harder to calculate, but substantial. Ecuador - Consumption GDP crashes in Q2 on Covid-19 and low oil price fallout. On June 11, 2019, the World Bank Board of Directors approved the 2019-2023 Country Partnership Framework (CPF) with Ecuador.This document establishes. [59] The rates of poverty were higher for populations of indigenous, afro-descendents, and rural sectors. In April 2017, Lenín Moreno was elected president from the leftist Alianza Pais (AP) party, succeeding President Rafael Correa (2007-2017), a populist May 12, 2020. [62] This is explained largely by emigration and economic stability achieved after adopting the U.S dollar as official means of transaction . The country has a nominal GDP of $6.078 trillion and a PPP GDP of $98.9 billion. Published on Mar 21, 2019 Ecuador and the International Monetary Fund (IMF) staff have reached an agreement on a set of policies to underpin a US$4.2 billion arrangement under the … Yet by 2017, the economy was growing again. To help reduce its debt-to-GDP ratio, the government is gradually lowering expensive fuel subsidies and reducing other untargeted subsidies. The projection, made before the protests, was that the economy would expand 0.5% in 2020. Clashes erupt at Ecuador fuel price protests Riot police use tear gas to disperse marchers protesting soaring fuel prices, as oil fields seizure slashes production. The Gross Domestic Product (GDP) in Ecuador was worth 109 billion US dollars in 2019, according to official data from the World Bank and projections from Trading Economics. DataBank Microdata Data Catalog. Subsequent protest led to the 2000 Ecuadorean coup d'état which saw Mahuad's removal from office and the elevation of Vice President Gustavo Noboa to the presidency. [22] The country is substantially dependent on its petroleum resources. Politicians in Ecuador target the underground economy and its workers who neither pay taxes nor follow the law, but do nothing to address the underlying problem of why compliance is so low. Ecuador’s economy experiences an annual average growth of 6.88%. Ecuador is ranked 28th among 32 countries in the Americas region, and its overall score is well below the regional and world averages. In 1999/2000, Ecuador suffered a severe economic crisis, with GDP contracting by 5.3%. The completion of the second Transandean Oil Pipeline (OCP in Spanish) in 2003 enabled Ecuador to expand oil exports. Such projects included negotiation of the Coca-Codo hydroplant. Ecuador is a signatory of the International Covenant on Economic, Social and Cultural Rights, among other treaties that protect these rights. [citation needed] Inflation fell from an annual rate of 96.1% in 2000 to an annual rate of 37.7% in 2001; 12.6% for 2002.[46]. Unemployment: 3.9%. Agriculture includes farming, fishing, and forestry. GDP growth (annual %) Ecuador. Investor protection, default resolution and corporate taxation are all areas where progress is expected. [56] In response, the U.S. Office of Foreign Disaster Assistance provided more than $3 million in assistance, including provisions airlifted in for 50,000 people in the earthquake-prone region and assistance with water and sanitation systems in affected areas. DataBank Microdata Data Catalog. This statistic shows the share of economic sectors in the gross domestic product (GDP) in Ecuador from 2009 to 2019. Following the completion of a one-year stand-by program with the International Monetary Fund (IMF) in December 2001, Ecuador successfully negotiated a new $205 million stand-by agreement with the IMF in March 2003. Public debt is equivalent to 46.1 percent of GDP. FDI Inflow: $1.4 billion. The Noboa government confirmed its commitment to convert to the dollar as the centerpiece of its economic recovery strategy, successfully completing the transition from sucres to dollars in 2001. [56] Consequently, the Correa government turned to nontraditional allies, such as China, for external finance. Deteriorating economic performance in 1997–98 culminated in a severe financial crisis in 1999. [48] GDP doubled between 1999 and 2007, reaching 65,490 million dollars according to BCE. The industrial sector has had enormous difficulty to emerge significantly. The extreme poverty rate has declined significantly between 1999 and 2010. [50][51] The monthly unemployment rate remained at about 6 and 8 percent from December 2007 until September 2008, however, it went up to about 9 percent in October and dropped again in November 2008 to 8 percent. The aim is to increase the private sector’s weight, in particular the oil industry. . Ecuador is stalled at above replacement level fertility and the population most likely will keep growing rather than stabilize. Countries that depend on oil exports, including Ecuador, are especially vulnerable. Ecuador Economic Growth After the worst economic downturn in recent history this year due to the Covid-19 blow, activity is set to rebound in 2021 as domestic and external demand gradually revive. Ecuador is substantially dependent on its petroleum resources, which have accounted for more than half of the country's export earnings and approximately one-third of public sector revenues in recent years. See more from the 2020 Index. [60] During the same year, 7.6% of health spending went to the 20% of the poor, while 20% of the rich population received 38.1% of this expenditure. The Gross Domestic Product (GDP) in Ecuador contracted 9.97 percent in the second quarter of 2020 over the previous quarter. Although the banking sector has grown, state meddling constrains the overall growth of financial services. [56] China agreed to the financing request and began to disburse funding, including nearly $1 billion in May and June 2015. Other taxes include value-added and inheritance taxes. [56] The Correa government also asked China for an additional $7.5 billion in financing in early 2015 as crude oil prices—the nation’s biggest export—weakened further. [36] This circumstance was due to the fact that imports grew faster than exports. An attendant shows an automotive product to a driver in front of a display with new fuel prices at a gas station in Quito, Ecuador, Tuesday, Oct. 15, 2019. Discontinuation of the “solidarity” contributions paid by employers and employees and allowing employers to deduct more of the cost of private medical insurance have made it easier to do business. Remittances from overseas Ecuadorian are also important. [19] Exports of non-traditional products such as cut flowers ($846 million in 2017) and canned fish ($1.18 billion in 2017) have grown in recent years. [56] As a consequence, the Economist Intelligence Unit (EIU) forecast that Ecuador’s economy would contract slightly in 2015, although the economy ultimately grew by less than half a percent. Tue 27 Aug 2019 10.02 EDT ... administration and the fund are implicated in the political repression as well as the broader attempt to reconvert Ecuador into the kind of economy … Browse by Country or Indicator. Ecuador has used the dollar as its own currency since a financial crisis in 2000. Noticias España – Los titulares de hoy, El Banco Central de Ecuador sitúa el crecimiento del 2008 en más del 6%, Banco Central del Ecuador – Resumen de pib, Ecuador Inflation rate (consumer prices) – Economy, Ecuadorian Inflation Accelerated to Three-Year High in 2011, América Latina y el Caribe – Ecuador – Datos destacados, "Ecuador and IMF Reach Staff-Level Agreement on a US$4.2 Billion Extended Fund Facility", New Paper Examines Ecuador's Success in Emerging from Economic Recession; Reducing Poverty and Unemployment | Press Releases,, "China draws fire on mega loan to Ecuador", "Ecuador to export energy to Colombia and Peru through El Inga electrical substation", World Bank Summary Trade Statistics Ecuador, Initiative for Infrastructure Integration of South America,, World Trade Organization member economies, All Wikipedia articles written in American English, Articles with unsourced statements from August 2012, Wikipedia articles in need of updating from May 2020, All Wikipedia articles in need of updating, Articles with unsourced statements from May 2020, All Wikipedia articles needing clarification, Wikipedia articles needing clarification from August 2012, Creative Commons Attribution-ShareAlike License, petroleum, food processing, textiles, wood products, chemicals, industrial materials, fuels and lubricants, nondurable consumer goods, Tariffs applied by Ecuador as provided by ITC's, This page was last edited on 1 December 2020, at 15:07. $11,718 per capita. As part of his anticorruption initiative, President Moreno has moved to increase judicial independence, but judicial processes remain slow. The annual consumption variation was estimated at 0.3%. The crisis was precipitated by a number of external shocks, including the El Niño weather phenomenon in 1997, a sharp drop in global oil prices in 1997–98, and international emerging market instability in 1997–98. See how Ecuador compares to another country using any of the measures in the Index. [27] From 2015 until 2018 GDP growth averaged just 0.6%. Ecuador: Economic activity drops at sharpest rate since August 2016 in March. [52], Between 2006 and 2009, the government increased spending on social welfare and education from 2.6% to 5.2% of its GDP. Definition: This entry shows where production takes place in an economy. Trade Freedom 66.0 Create a Graph using this measurement, Investment Freedom 35.0 Create a Graph using this measurement, Financial Freedom 40.0 Create a Graph using this measurement. Ecuador is substantially dependent on its petroleum resources, which accounted for about a third of the country's export earnings in 2017. In particular, the country has made improvements in the net secondary enrolment rate (87.2%), which is now on the same level as Chile Article IV/Country Report: March 21, 2019 Outstanding Purchases and Loans (SDR): 1612.16 million (September 30, 2020) Special Drawing Rights (SDR): 5.83 million In 2019, the government continued to probe high-level corruption and illegal campaign contributions to former President Rafael Correa’s regimes, calling Correa’s administration a “well-structured criminal organization.”, Tax Burden 77.5 Create a Graph using this measurement, Government Spending 57.9 Create a Graph using this measurement, Fiscal Health 62.3 Create a Graph using this measurement. On January 9, 2000, the administration of President Jamil Mahuad announced its intention to adopt the U.S. dollar as the official currency of Ecuador to address the ongoing economic crisis. [29][30], Oil accounts for 40% of exports and contributes to maintaining a positive trade balance. [56] President Moreno later discovered loans made by China over the years currently require that Ecuador pay China back with almost 500 barrels of crude oil—or roughly three years of the country’s oil production. [19] In the past, Ecuador’s economy depended largely on primary industries like agriculture, petroleum, and aquaculture. [56] A U.N. appeal by the Office of Coordination of Humanitarian Assistance sought to raise $73 million. Ecuador’s economy returned to positive, but sluggish, growth. [56] From 2005 to 2014, Chinese banks provided almost $11 billion of financing to Ecuador. [56] Additional loans from China and the World Bank to help ease the government’s balance-of-payments needs were considered. La economía de Ecuador, que afronta problemas que le han llevado a contraer deuda externa, creció en 0,3 % en el segundo trimestre de 2019 frente al mismo período de 2018, informó el … The IMF said the reforms were aimed at “improving the sustainability of the Ecuadorian economy”. [20] In 2017, remittances constituted 2.7% of country's GDP. [55] In addition it claimed that $3.8bn in foreign debt negotiated by previous administrations was illegitimate because it was authorized without executive decree. This city is also the largest business center of the country. The distribution gives the percentage contribution of agriculture, industry, and services to total GDP, and will total 100 percent of GDP if the data are complete. Economy | November 18th 2020 Ecuador's trade surplus continues to expand in September Import demand will rise as the economy recovers, but robust growth … Restructuring deals with creditors and a new IMF arrangement will provide some respite for the beleaguered government in 2020-21. Published on Mar 21, 2019 Ecuador and the International Monetary Fund (IMF) staff have reached an agreement on a set of policies to underpin a US$4.2 billion arrangement under the … Explore. The unemploymen… Overly rigid labor regulations harm labor market flexibility. [56], Ecuador’s access to global financial markets also had been limited by its 2008 default on $3.2 billion in debt to global lenders. This year, for the first time in a decade, economic freedom has made a dramatic turn for the better in Ecuador, and the economy has reemerged from the ranks of the repressed where it resided under the previous socialist government. The total value of exports and imports of goods and services equals 45.9 percent of GDP. [23][24] When Ecuador was part of OPEC, it was one of the smallest members[25] and produced about 531,300 barrels per day of petroleum in 2017. According to the Ecuadorian Central Bank, the economy reached a growth rate of 3% in 2017, 1.4% in 2018, -0.1% in 2019, and approximately -8% in 2020 based on COVID-19 estimations. The “Republic of the Equator” initially gained independence from Spain in 1830. The agreements include a USD 4.2 billion deal with the IMF and USD 6 billion worth of loans from institutions such as the World Bank, the Andean Development Corporation and the Inter-American Development Bank. [61] In 2001 it was estimated at 40% of the population, while by 2011 the figure dropped to 17.4% of the total population. [28] Ecuador's president, Lenín Moreno, has launched a radical transformation of Ecuador’s economy since taking office in May 2017. Economic Policy; Ecuador Reaches a Deal—but Unrest May Return ... October 16, 2019. After growth of 7.4% in 2011, Ecuador’s growth averaged 4.5% from 2012-2014. A series of loan deals should also help breathe life into Ecuador’s sluggish economy. The economy of Ecuador is the eighth largest in Latin America and the 69th largest in the world by total GDP. Ecuador has developed a new economic plan designed to put the country’s debt on a firm downward path, create jobs, protect the poor and most vulnerable, and bolster the fight against corruption. The recent strike that paralyzed the Andean nation for almost two weeks, has left a gaping hole in Ecuador’s economy, this after President Lenin Moreno called back his elimination of fuel subsidies which provoked the violent protests. Please update this article to reflect recent events or newly available information. The statistic shows the growth in real GDP in Ecuador from 2009 to 2019, with projections up until 2021. 1.2% 5-year compound annual growth. The industrial sector's main problem is the deficit of energy,[64] which the current government has tackled with the improvement of performance on existing hydro plants, and the creation of new ones. Cracking down on those who have no other recourse just perpetuates poverty and keeps them in the informal economy. The discourse of crisis promoted in the first two years of the Moreno government (2017-18) was a political strategy designed to create distance from the administration of his predecessor Rafael Correa. Last update: February 2020 [56] President Correa’s plans to begin extracting crude oil from the Ishpingo, Tambochoa, and Tiputini field in Yasuní National Park in the Amazon to provide an economic boost did not salvage the economy from going into recession. [33] Pines and cedars are planted in the region of the Sierra, walnuts and rosemary, and balsa wood, on Guayas River Basin. In 1998, 10% of the richest population had 42.5% of income, while 10% of the poor had only 0.6% of income. Article IV/Country Report: March 21, 2019 Outstanding Purchases and Loans (SDR): 1612.16 million (September 30, 2020) Special Drawing Rights (SDR): 5.83 million These factors highlighted the Government of Ecuador's unsustainable economic policy mix of large fiscal deficits and expansionary money policy and resulted in a 7.3% contraction of GDP, annual year-on-year i… The plan, supported by a US$4.2 billion Extended Fund Facility from the IMF, along with additional financial support from the international community, will give Ecuador the boost … [53] Starting in 2007, when its economy was surpassed by the economic crisis, Ecuador was subject to a number of economic policy reforms by the government that have helped steer the Ecuadorian economy to a sustained, substantial, and focused achievement of financial stability and consistent social policy. 8 Oct 2019 The investment variation plummeted to -2.5% while the industrial production also decreased by 1.4% in 2015. Write intro here Economic activity dropped 2.6% year-on-year in March (February: -2.4% yoy) and marked the worst reading since August 2016. The economy was pummeled in the second quarter on the double shock of the Covid-19 outbreak and low oil prices, with GDP collapsing 12.4% on an annual basis (Q1: -2.3% yoy). Ecuador: Inflation hits highest level since May 2017. Its dollarized economy depends substantially on petroleum, which accounts for more than half of export earnings and approximately 25 percent of public-sector revenues.

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