Debt will be re-profiled through three channels

Ecuadornews:

The strategy for the management of public debt contemplates rapprochement with multilateral organizations, negotiations with China and options for commercial obligations. The increase of tariffs to 375 subheadings is in the hands of the Comex and will be applied while the import valuation plan is specified.

The Economic Program started from an evaluation of the budgeted items problems with income that, at the end of the day, could not be covered in full. The first explanation of the axes and measures was given yesterday by the Minister of Economy and Finance, María Elsa Viteri, who assured that “it was obvious that we could not make some” of the aspects originally estimated.

She focused on the axis of stability and fiscal balance, which is based on generating income via public sector efficiency. On the other hand, said that in terms of public debt is working to, as far as possible, not raise the budget ceiling but assess what is the best use of sources of financing available to the Government. Viteri spent several minutes to replicate the comments of analysts who have questioned her.

She said that these are “ill-intentioned” people, since his decision to declare a part of the public debt in ‘default’ in 2008 did not harm the country. For Rosa Matilde Guerrero, ex-staff member of the Inter-American Development Bank (IDB), the program proposed by the Government “is going in the right direction”. He said it in the sense that economic growth cannot be sustained by an inefficient spending scheme, short-term debt and consumption, but in improving the productivity and competitiveness of large, medium, small and micro enterprises.

Among the main economic goals is to decrease the fiscal deficit from 5.64% in 2018 to 2.47% in 2021. “It is an advance, but clearly it seems to me that it could be insufficient, since the fiscal deficit is very wide with almost 6%. % of GDP, “said Guerrero, who is also a member of the Forum of Economy and Public Finance.

From another perspective, Pablo Dávalos, member of the Forum of Alternative and Heterodox Economy, the measures have a neoliberal cut with contradictions of a technical and macroeconomic type. “The government says that it will reduce the deficit to 2.47%, but this is not real because it would mean that the rate of debt will decrease in a context where it does not have alternative sources of liquidity,” Dávalos said EL TELEGRAFO newspapaer tried to obtain the reaction of the former Minister of Finance, Carlos de la Torre, but there was no response. Days ago he declared that the country faces a “critical situation”. The optimization of public expenditure and the investment plan will be explained by the authorities on April 10 and 17. (I)

Source: https://www.eltelegrafo.com.ec/noticias/economia/4/deudapublica-ecuador-programaeconomico