“An economic recovery is evident, now it’s time to aim for growth”

“An economic recovery is evident, now it’s time to aim for growth”

“An economic recovery is evident, now it’s time to aim for growth”
June 06
12:11 2017

Quito (Pichincha). — Minister of Economy Carlos De la Torre made an evaluation of the Ecuadorian economy. He explained how the economic model of the national government will be applied. Moreover, the minister stressed out that the economy’s structure conditions are defined by the interaction of external, fiscal, currency factors and the so-called real economy.

On this matter, he highlighted that since 2015, Ecuador has to overcome an array of external factors which affected the commercial balance and put pressure on the fiscal administration. Some of these factors are the drop in oil prices and dollar appreciation. “The main vulnerability of the Ecuadorian economy lies in the external sector,” he said.

However, an economic recovery became evident since last year and until November 2016, the financial sector recovered 1.3 billion dollars in deposits which did not occur with the provision of loans which reached 650 million dollars.

About inflation and international reserves, he mentioned that once the country adopted the US dollar as official currency, this did not exceed 2 digits, “on the contrary, it reduced steadily.” He added that the Ecuadorian Central Bank has enough international reserves with coverage equal to 107% of private bank portfolio.

He referred to tax collection as a good sign. Comparing figures from April 2016 with those of April 2017, there is a collection increase of 11.57 percent. “An economic recovery is evident, now it’s time to aim for growth,” said De la Torre.

The secretary of state also highlighted the achievements of the last decade in terms of wealth distribution. He informed that during 1990 to 2005, the income poor people received increased only by 20 percent in comparison to wealthy people’s 100%. However, during 2006 to 2016, poor and middle class people’s income increased by 100% compared to the wealthy’s 40%.

On the country’s debt, he said that current figures are similar to those of the country back in 2005 with the difference that there was no economic crisis in these years and that the economy was half the current’s size. He explained that debt has increased in the last years as a result of great investments made by the State in strategic areas, works that should now be used to generate resources. “Public investment in strategic areas created a budget deficit and for this reason the government issued 2 billion dollars in bonds from which the first 1 billion will be paid at 8.75% in 6 years interest and the rest will be paid at 9.62 percent interest in ten years.” Accumulated deficit is 4.5 billion to date, an amount which is being analyzed how to cover in the state’s budget being created for the rest of 2017.

About economic policies to be implemented, the government will focus on giving the private sector a greater role, increasing access to loans, promoting exports, including the bank in the government’s social programs and strengthening the dollarization system through a system of incentives aimed at the productive and commercial sectors to boost in inflow of currency.

“Future lies in promoting greater productivity being competitive; maintaining a sustainable growth, giving an important role to the private sector using infrastructure implemented by the previous administration and creating opportunities to promote entrepreneurship. HP/El Ciudadano.

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