Central Bank foresees slight growth of the economy in 2021

The most recent estimates from the Central Bank of Ecuador confirm the decline of the Ecuadorian economy in 2020. Although the country begins to experience a slight recovery after six months of health emergency , the year will end with negative values .

Central Bank foresees slight growth of the economy in 2021

“We are hardly going to be able to change the path we had in the first seven months of quite strong decline, our forecast in the worst case scenario of 9%,” said Verónica Artola , general manager of the institution. However, it raises some indicators that allow us to forecast that 2021 will be a better year.

The first, the growth of international reserves . The country was bordering on a reserve of $ 2 billion at the end of March and according to the official this time it reaches $ 3.5 billion.

The second, the slight increase in the price of a barrel of oil above $ 40. Although at this point, the official recalled that the General State Budget was built with a value of $ 51.

And the third element that Artola includes as a sign of a recovery in the economy is the inflow of foreign exchange . The head of the Central Bank indicated that $ 1,200 million more than in 2019 are registered for this concept.

However, the economist Ramiro Crespo makes a point about the recovery that the Central Bank envisions for the year 2021: “I believe that growth will be 1.5% more or less, but this is about the end of this year. So anyway, we will continue in an economy with a lower Gross Domestic Product than the one before the pandemic. ”

Crespo highlights the renegotiation of the debt and the agreements with the International Monetary Fund (IMF) within the strategies to face the economic crisis ; although he considers that the recipe should include the strengthening of the private sector.

“A dollar in the hands of the State is not more productive than a dollar in the hands of the productive private sector . We have to create a broader financial sector where investment banks are included , where venture capital investment funds are included , and we have to create an environment that attracts foreign direct investment , that savings come from abroad ”, explained the expert in economic issues.

At the moment the sectors with the best prognosis according to the Central Bank of Ecuador are: Transportation, Commerce, Tourism and Construction .