The Government deals with a ‘shrinked’ wallet

Ecuadornews:

The national government is struggling with excessive expenses and increasingly shorter revenues. The figures say: this year records the lowest national income since 2012.

EXPRESO reviewed the budget revenues of the government of former president Rafael Correa and compared them with the numbers of Lenin Moreno. From January to August 21 of this year, for example, the State received 19,209 million dollars. In the same period of 2016 last year of the Correa government- the amount was 21,615 million dollars. That is, a difference of 2,406 million. 11.1% off

The reduction is even more alarming if it is considered one of the years with higher revenues of the previous administration, 2014. In the period analyzed, the government of the self-styled citizen’s revolution had 25,371.5 million dollars. 6,162.5 million more than in this year.

Hence the need for austerity that urges the Executive. Moreno and his economic team have limited resources, although the expenses have not decreased to the same extent. This year, from January to August, the paid execution totaled 18,372.4 million dollars. In 2016, the total was 19,911 million. The reduction was 7% when the income drop was 11%.

The decrease in resources, according to data from the Ministry of Economy and Finance, is due to the fact that the government receives less money in several ways. During the first eight months of 2016, for example, the correísmo had more resources for tax collection than the current administration. In that year, 9299 million dollars were obtained, now the tax value was 9,184 million. 45 million difference.

There was also a reduction, higher, in pre-sale crude oil revenues. During the government of Rafael Correa several advance oil sales were signed with Chinese and Thai companies. These documents, which committed national crude until 2024, are now being questioned by the Comptroller’s Office and the State Attorney General’s Office.

For these transactions, in 2016, the State received 1,220 million dollars. The funds were used to finance “works for good living”. The transactions are also under analysis by the authorities in the face of certain irregularities detected.

This year, given that the contracts signed at the Correa stage include disbursements in the coming years, Ecuador received 400 million dollars for pre-sales.

According to the Finance budget, the country will receive an additional 295 million dollars for sales to China and Thailand. They are not new presales, they are pending disbursements.

The biggest income cut comes from the lower debt that the economy minister, Richard Martínez, launched. For this month, in 2016, the then Minister of Economy, and current advisor to Nicolás Maduro, Patricio Rivera, hired debt for 6,825 million dollars. This year, the amount of public financing is 4,153 million.

The expenses of this year

Salaries

Until August 21, the Government spent 5,287 million dollars to pay public sector salaries. The amount includes salaries of the bureaucracy and of teachers, doctors and defense personnel. The budget is 9,566 million.

Presales

The presales of crude oil are tied to credits that the government of Rafael Correa hired, but that must be canceled by Lenin Moreno. For that obligation, it was canceled, until August 21, about 739.8 million dollars.

Debts

Advance sales are not the only obligations of the public sector. The government of Lenin Moreno has also paid for other commitments this year. To date, 2,074 million dollars have been paid for this item.

Investment

Public expenditure on investment decreased significantly this year. For public works, for example, more than 880 million dollars were budgeted. However, only 144 million have been used.

To know

2017

Until May 24, 2017, Correa was president. Until August of that year, revenues totaled more than 22,471 million dollars.

Taxes

For taxes, the national government received, last year, 9,382 million dollars.

Debt

Last year, with two governments, a public debt of 9,264 million was reached. (I)

Source: https://www.expreso.ec/actualidad/econmia-estado-ecuador-gobierno-presupuesto-CA2345026