MADE. The manager of the ECB, Guillermo Avellán, explained the expectations of a complex year
Oil production falls 10% and exports slow down. GDP will not grow more than 2.6% this year. Greater spending on public works will be the lifeline; while the country risk reached 1,971 points.
Contrary to what was said by the Minister of Economy, Pablo Arosemena, to LA HORA in an interview from the past on March 28, 2023, Gross Domestic Product (GDP) will not grow at 3.1% this year.
According to the latest estimate of the Central Bank of Ecuador (BCE), the percentage will be a maximum of 2.6%.
The manager of this institution, Guillermo Avellán, during a press conference on March 31, 2023, said that Oil production will be reduced from the budgeted 188 million barrels to 178 million barrels, that is, 10% less. In addition, Ecuadorian exports are slowing down
Avellán affirmed that, as a consequence of these two factors, international reserves will close 2023 below $8,000 million. This is a scenario contrary to 2022 when $8 billion was widely exceeded.
The final level of reserves will depend on the price of oil recovers during the second half of the year. The ECB expects that in that period it will fluctuate between $80 and $90 per barrel.
On the other hand, it is also projected that around $3.2 billion in loans from multilateral organizations will arrive.
Public investment will be the lifeline
The ECB manager stressed that The lifeline of economic growth in 2023 will be greater public investment. Estimates indicate that this investment will be at least $933 million above what was registered in 2022.
Although there is still no estimate on the impact of the floods and the earthquake on economic growth; and the damage that new stoppages and de facto measures could cause, Avellán said that the assumption is being made that private investment is going to be less.
Thus, all the cards are in more public investment in roads, educational units and health sector.
Along with this higher state spending, it is also expected that household consumption, despite the various problems facing the country, will continue to rise.
This consumption, with its highest level in the last decade, was the main engine for 2022 to close with an economic growth of 2.9% of GDP.
call to dialogue
The manager of the Central Bank of Ecuador (BCE), Guillermo Avellán, made a call to put down attitudes of confrontation and destabilization. “Consensus and dialogue are needed to face the country’s problems,” he said.
In addition, he recalled that the violent strike in June 2022 caused losses of $1,115 million and a decline in economic growth of 0.6%.
Likewise, Avellán recalled that The increase in country risk is a symptom of political instability and not of the current government’s ability to meet its commitments and payments.
“There is strength of the current government to fulfill obligations. The question is the payments from 2026 », he said.
The country risk currently has already reached 1,971 points; and there are still several weeks left to know the outcome of the political trial against Lasso.
Given the requests that part of the international reserve be spent, Avellán recalled that it is not government money. Only $314 million are in the treasury account (Ministry of Economy); the rest is used every day by their owners (financial institutions and various public entities). (JS)
FACT.- So far, it is estimated that the winter has had a preliminary affectation of $200 million.
FACT.- The most dynamic economic sectors by 2023 will be fishing, construction and accommodation.
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