Macroeconomic Forecasts - Ecuador - SEPT 2015
Ecuador's ability to generate fiscal revenues will be hampered by low oil prices, and we forecast that the budget deficit in 2015 will be the widest in decades. Nevertheless, improving non-oil revenue generation will help the government improve its fiscal account in the coming years
Proposed reforms to the country's estate tax law demonstrates Ecuadoran President Rafael Correa's commitment to left-of-centre populist policies, which will remain a source of political tension in...
Ecuador's current account balance will remain under pressure, despite the recent bounce in oil prices which has narrowed the deficit in recent months. The strong US dollar and sluggish recovery in oil prices will keep the country's current account in the red for the next several years.
Due in large part to oil prices, which we forecast will remain very low compared to recent years, we forecast a sharp decline in real GDP growth in Ecuador over the next several years. Lower oil receipts will have a particularly significant impact on government expenditures, and will indirectly weigh on private consumption.
BMI View: Ecuador's current account will go into deficit in the year ahead, on the back of weak oil prices and declining export competitiveness. A poor business environment will temper capital...