The index that measures the level of positivism grew 7.5 points. The sectors of industry, commerce and services evolved in a positive way. The Business Confidence Index (ICE), calculated by the Central Bank of Ecuador, increased by 7.5 points in February 2019. Long-term growth is expected.
This is due to the fact that businessmen showed a gradual economic growth in the sectors of industry, commerce and services. This scenario is reflected, for example, in the increase in employment in the fields of industry and the commercial sphere.
In the first, the labor presence increased by 0.1% compared to January. That percentage, according to the ICE of the Central Bank, will be maintained this year. The same trend can be seen for this year in the production sector dedicated to the provision of services and in the commercial area.
The employers assure that this minimum increase obeys, in part, to the laws that the Government approved to promote development from the private sector. Patricio Alarcón, president of the Chamber of Commerce of Quito, said that Lenin Moreno’s vision of opening the productive system from the private sector is correct.
However, for the levels of business confidence to increase, he argued, it is necessary to focus subsidies and lower taxes so that tax collection increases and the Ecuadorian State facilitates business. As long as these conditions are satisfied, there will be a high level of business confidence.
This is foreseen by Marcelo Varela, economic analyst and professor at the Institute of Higher National Studies (IAEN). He believes that this index was increased by the agreement between the Government and the International Monetary Fund (IMF). There were established, among other conditions, that Ecuador make labor changes (reforms) to boost the generation of more jobs and competitiveness.
Pablo Zambrano, executive president of the Chamber of Industries and Production (CIP), agrees that agreements between Ecuador and multilateral organizations such as the IMF were key to increasing the level of business confidence.
The leader considers that the current scenario of the country is suitable for the sector it represents. “The IMF and the multilateral organizations are strategic partners. They provide technical advice and financing, which allows the economic plan of the country to be implemented, “he said.
Alarcón and Zambrano also hope that the conditions of the productive sectors will improve when the new Productive Development Law comes into force, which the Executive announced several days ago. “It is a great opportunity for labor reforms,” said Alarcón.
However, the economic analyst and university professor, Oswaldo Landázuri, believes that if the Government collects all the recommendations of employers, will motivate, henceforth, to have more unemployment and deterioration in the size of sales. “I see a difficult scenario for the country. The business sector, although it will have greater certainty, will also have lower employment rates, “said the economic analyst.
Red balances in construction
The Business Confidence Index (ICE) of the construction sector decreased considerably. There is less employment generation and companies project a worse scenario in the following months (see infographic).
Silverio Duran, president of the Chamber of Construction, said that among the reasons are the non-existence of real estate demand and the reduction of public works by the National Government. (I)