Fiscal And Debt Outlook - Fiscal Sustainability Will Require Further Cuts - MAR 2018

BMI View: Ecuador's fiscal deficit will narrow in the coming years due to rising oil revenues and moderate expenditure growth. However, the fiscal situation remains unsustainable and additional expenditure cuts will be required to reduce the government ' s financing needs .

  • Ecuador's fiscal situation will remain unsustainable without further consolidation efforts, as oil price gains alone will not be enough to alleviate sizeable budget shortfalls.

  • President Lenin Moreno has begun to make fiscal adjustments, but further cuts will be required and political risks abound amid an ongoing rift with former President Rafael Correa for control of the ruling Alianza Pais (AP).

  • Large Fiscal Deficits To Persist Without Cuts
    Ecuador - Fiscal Balance
    f = BMI forecast, Source: BCE, BMI

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