The aggregate public debt is already at 40.2% of GDP
As a rule of fiscal prudence, the Planning and Public Finance Code establishes that State indebtedness should not represent more than 40% of the GDP. However, according to the Government, to calculate this ceiling, only the so-called consolidated debt should be taken into account, which excludes the State’s obligations with other agencies such as the National Financial Corporation (CFN) or the Ecuadorian Institute of Social Security (IESS) from the calculation.
The issue was thus defined through Decree 1218, issued in October 2016 by President Rafael Correa. It was pointed out that the debt burden on the GDP “is based on the Consolidated States (…), according to the Manual of Statistics of Public Finances of the International Monetary Fund.” Therefore, public debt represents 27.3% of the GDP, which means that the government is far from reaching the legal limit and still has a large margin of indebtedness.