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The country's economy is growing at a slower pace. The gross domestic product recorded a positive behavior of 1.9% in the first quarter of this year, compared to the same period of 2017, according to figures released yesterday (June 29, 2018)) by the Central Bank of Ecuador (BCE).
For the editor of Weekly Analysis, Alberto Acosta Burneo the economy loses its pulse because the government has cut public spending.
Another factor that should be considered, according to data from BCE is that stocks accumulated by businesses since last year began to fall this year. That is, the productive sector sells on the market the production that has been repressed. "It is not a new production."
But in the middle of this decreasing scenario can be highlighted, at least, three positive signs in the economy. The first and most important is that private investment is restored, which shows a recovery of the confidence of businessmen .
The second is that consumption of ] Ecuadorian households continue to grow at an accelerated rate, even higher than that recorded in the first quarter of last year .
According to the ECB, this behavior is related to an increase in the consumer credit portfolio which shows an increase of 29.6% in the first quarter. 19659003] Patricio Alarcón, president of the Ecuadorian Enterprise Committee (CEC), adds a third factor. While the data show a slowdown or a cooling of the economy the figures are not as strong in government spending as the first quarter of the year . 2017.
With an injection of 970 million USD in public resources the month of March last year was the highest spending month of 2017. That month, spending on works public and other investment expenditures soared.
These resources were injected into the economy through payments made by the government to its suppliers and the public sector . In this way, these funds reached the families, which increased consumption and this increased the growth figures for this quarter, which closed at 3%, said the head of the EEC
reduction In public spending, however, this year predicts that the deceleration of the economy could continue for a few more quarters.
The weekly analysis provides that under these conditions it will be difficult to reach the target set by the ECB until the end of the year, which is 2% . "A decline in government revenues will continue to drive down the rest of the economy," says Acosta Burneo
. In the first quarter, imports also increased by 8.4% due to decommissioning. guarantees. However, Alarcón pointed out that more than 70% of these purchases abroad correspond to goods and equipment for the industry .
In fact, according to data from BCE one of the factors that contributed the most to the increase in investment was the importation of goods from. equipment for agriculture. In addition, they increased the purchase of machinery, tools, equipment transport and traction for this activity. The import of equipment goods for the industry showed a positive variation of 28.3%. The ECB also pointed to the import of industrial machinery, which rose 53.9%.
In contrast, investment in the transportation sector declined, albeit to a lesser extent than in the first quarter of 2017. The latter thanks to the increase in housing credit, which shows a slight recovery in activity
At the same time, the oil sector recorded a negative performance of 4.8%, which is explained by a drop in production
- L & D Ecuadorian economy grew by 1.9% in the first quarter of 2018
- payments from Ecuador recorded a surplus in the first quarter of 2018
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