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Ecuador has an economy with low running costs and high investments
Posted On 21 Apr 2014
While Ecuador grew in the last years a 4.35% per cent between 2007 and 2013; and peaks of up to 7.8% percent in 2011, the doubts that the economy may be weakening begin to appear.Is possible to mention that the fiscal deficit is almost $ 5 billion, equivalent to 4% of the gross domestic product (GDP). Or that external debt totaled 13.029 billion dollars, being the 36% bilateral loans with China. Or that the Correa Government has requested a credit of $ 1 billion to the World Bank, something that had been rejected in the past. Or that the State has taken the decision to issue bonds by $ 700 million. I.e. public coffers seek financing, seek more funds.
However, Ecuador is one of the Nations where the current GDP expenditure has less weight, while it leads in investments. The Economist and former Finance Minister, Fausto Ortiz, recalls that this heading amounts to 11% while that in the region only reach a 4%. `The Government wants to push the economy strongly through the public work,´ he recalls.
This level of indebtedness is difficult to maintain, added Ortiz. An economy can not rely solely on public works. You need greater role of the private sector. That is why the Government has, for example, initiated a project to change the productive matrix. This movement shows some anticipation in the long run, since Ecuador growth is directly linked to the price of oil, a nonrenewable natural resource.
