Despite the negative results in the second quarter of the year, in the context of the Covid-19 pandemic, the Central Bank assured in its report that there are symptoms of a “gradual reactivation of the productive apparatus.”
The Central Bank of Ecuador (BCE) reported that the country decreased 12.4% in the second quarter of 2020, as a result of the suspension of activities due to quarantine and the massive confinement that was applied to contain the expansion of the coronavirus pandemic in the country.
According to a report on the National Accounts published by the institute, the country’s Gross Domestic Product (GDP) decreased by 12.4 percent compared to the same period last year, which is “the largest quarterly drop observed since 2000.”
The Central Bank specified that this rate is due to the fact that the GDP added between last April and June just 23.55 billion dollars in current values.
However, he assured that the reduction of the indicator in Ecuador was less than that suffered by other countries in the region in the second quarter of the year, such as Chile, whose percentage was negative with -14.1 percent, Colombia (-15.7 %), Mexico (-18.7%), Argentina, (-19.1%) and Peru (-30.2%).
The collapse of GDP, according to the ECB, is explained by the 18.5 percent drop in investment, the 15.7 percent decline in exports, the 11.9 percent reduction in household consumption and the 10.5 percent contraction in government consumer spending. In addition, “imports of goods and services, which by their nature decrease GDP, were 20.8 percent lower than those registered in the same period of 2019,” the ECB said.
Despite the disappointing results, some products achieved a positive performance in their sales abroad, such as processed shrimp (8.1%); Banana, coffee and cocoa exports achieved a joint growth of 3.2 percent and other miscellaneous food products of 0.2, among others.
Regarding imports, the products that decreased the most were refined petroleum oils (-22.6%), basic chemical products (-11.7%); machinery, equipment and electrical appliances (-18.5%) and common metal products (-5.8%), the report states.
The decrease in final household consumption was affected by the 16.3 percent decrease in remittances received from abroad, which went from 809.6 million dollars in the second quarter of 2019 to 677.5 million in the same period 2020.
Regarding the reduction of government spending, the Central Bank report specifies a 5.1 percent decrease in the remuneration item, which totaled 2,073.1 million dollars, 110.8 million less than in the second quarter of 2019.
This is due to the decrease in public employment, which in interannual terms fell 3.2 percent, although the reduction of 50.1 percent in the purchase of goods and services by the Government also had an impact, which went from 666.7 million dollars in the second quarter of 2019 to 333 million in the current period.
Agriculture, in general, also decreased 1.2 percent, exports of fish and other aquatic products fell 7.1 percent, the electricity sector 2 percent, and financial services 4.8 percent.
The commerce industry fell 9.8 percent, manufacturing fell by the same percentage, professional activities fell 10.6 percent, and “Education and health and social services” decreased 12 percent, the report said.
The construction sector decreased by 12.7 percent, while the accommodation and food services sector by 18.3 percent, driven by a 98 percent drop in the arrival of tourists to the country.
Restrictions on internal human mobility affected the transport sector, which decreased by 29.7 percent, the ECB added in its report. Among the few sectors that were in a positive scenario, the Central Bank report highlighted aquaculture and fishing, which grew 10.4 percent.
Despite the negative results in the second quarter of the year, driven by the pandemic, the Central Bank assured in its report that there are symptoms of a “gradual reactivation of the productive apparatus.” (C.D.A.)
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