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Lenín Moreno’s economic plan comes after ten months of government
Posted On 02 Apr 2018
Ecuadornews:
A little more than ten months after the government took office, President Lenin Moreno will present today, at 8:00 p.m., an economic plan, in the face of a complicated situation in the country.
The document, delivered last week by the Minister of Economy and Finance, María Elsa Viteri, has been officially kept in reserve.
President Moreno has ruled out that economic packages will be applied, while the Minister of Foreign Trade, Pablo Campana, has denied a three-point increase in Value Added Tax (VAT); “The country has to go through efficiency, reducing expenses and generating new revenues (…)”.
The plan comes when Ecuador remains with a Country Risk of 577 points, higher than when it started in January and reached 459 points.
In addition, this week, the Central Bank announced that in 2017 it recorded an economic growth of 3%, based on the expenditure of households and the Government. This, which is read as a revitalization of the economy has generated an increase in imports as well.
Roberto Aspiazu, executive director of the Ecuadorian Business Committee (CEE), says that his sector remains relatively optimistic about tonight’s announcement. For him, the plan must go through a matter of gradual fiscal adjustment that also allows to stop needing as high levels of financing as now. He explained that it would be advisable also to look for measures that support the productive development and competitiveness of the country.
Aspiazu comments that as CEE they have agreed to a couple of meetings with Minister Viteri, in which she has been receptive to certain proposals. Just last week the president of the EWC, Richard Martinez, had made a couple of proposals. The first, apply a new tax amnesty, which in calculations of that union would generate the payment of $ 700 million to the Treasury. They had also suggested the elimination of the super gas subsidy that represents an expense to the State for $ 300 million.
Within unofficial documents and previous versions of the plan, it has been proposed to acquire new, cheaper debt to free up expensive debts assumed under the previous regime. However, this will depend on the behavior of the Country Risk.
It has also been known that within the diagnosis it is considered necessary to change the economic model, since the current one is based on spending and consumption, but not on investment. (I)
