Ecuador expected to end 2020 with a global balance sheet (income minus expenses, without debt interest) of $ 2802 million (2.8%) and had even calculated that it could arrive without a deficit, in this same item, in this year. This reduction would lead to a lower need for indebtedness.
This goal contained in the Extended Financing Facility Agreement with the International Monetary Fund (IMF) will not be achieved. This is the opinion of several experts, for whom a rethinking of this agreement with the IMF becomes inevitable.
Walter Spurrier, director of Weekly Analysis, explained that in a first scenario the Government had estimated to raise about $ 2273 million with its new economic measures in 2020. Of those, $ 1.5 billion would come from the elimination of extra and super gasoline subsidies. However, after the violent protest against this measure, which also caused losses due to acts of vandalism in buildings, oil wells and attack on floriculture, the objective failed.
With the tax reform, which today will have the first of two debates and that would generate $ 700 million, the adjustment falls short, he said.
There is uncertainty about the future of this reform, due to the opposition between assembly members and businessmen.
For Santiago García, university professor, it is clear that these goals will not be met. It suggests that the Government initiate a negotiation to rethink measures and commitments. “You can no longer work on something that does not exist and you have to put political issues on the table,” he says.
According to García, subsidies cannot be insisted, as there is strong social pressure.
Meanwhile, Spurrier believes that the IMF does not want a new failure – referring to Argentina – among its associates. Therefore, he considers that he could be flexible and even that he could disburse new funds. Another point in favor of the country is that the United States wants to have good relations with Ecuador and keep its distance from Venezuela.
This same week, Alejandro Werner, director of the IMF’s Western Hemisphere Department, said the agency closely monitors the situation in Ecuador and extended its solidarity to all those affected by the protests.
He explained that the priority of the IMF and the Government has been to reduce debt, strengthen growth, support investment in health and education. He supported the Government’s goals that he said are to protect the most vulnerable, fight corruption and improve competitiveness and employment.
Yesterday, the manager of the Central Bank of Ecuador (ECB), Verónica Artola, confirmed that within the legal deadlines Finance delivers the 2020 Proforma today.
Among the macroeconomic forecasts indicated, a GDP growth of 0.6%, an oil price of $ 51 and an annual inflation of 1.5% are expected. It is unknown whether it will include a review of subsidies.