The health emergency and the drop in the price of oil affect the economic impact.
The Central Bank of Ecuador (ECB) announced that the economy will decrease between 7.3% and 9.6% this year.
The entity indicated that the Gross Domestic Product (GDP) will be located this year in a range of between USD 65,015 million and USD 66,678 million.
Before the health emergency due to the coronavirus, the Central had planned that the country’s economic activity would grow by 0.7% this year.
The Central explained in its new report that the effect of the suspension of productive activities in the country, due to the Covid-19 pandemic, and the international uncertainty of Ecuador’s trading partners regarding the dynamics of its economic recovery influenced the estimates. .
The entity elaborated three scenarios with variations that could be expected in crude oil production and exports, non-oil imports and exports, public and private investment, and government spending.
According to the ECB, in the first months of 2020, the Ecuadorian economy was affected by the state of emergency that caused the suspension of all economic activities, leaving aside face-to-face work.
At the international level, the economy was affected by the fall in oil prices and the low demand for the product.
The entity noted that government spending will decrease by 5.6% in 2020 compared to 2019. This reduction is mainly explained by the cut in the items of wages and salaries, and in the purchase of goods and services.
Regarding the investment, the Central announced that a 14% drop is expected compared to the previous period. This is due to the expected reduction in public investment of USD 1,300 million and a fall in imports of capital goods (machinery) for USD 1,818 million.
Regarding exports, they would have contracted between 3.8 and 5.2% in 2020, as a result of a contraction in non-oil exports such as bananas, coffee and cocoa beans, and shrimp.
Source: El Comercio, social networks
Be the first to comment