Ecuador’s country risk could not reverse its rise as a result of the national strike that the country experienced in June 2022 and closed the year at 1,250 points. At the beginning of 2023 it had a slight drop of five points and as of January 3 the Central Bank places it at 1,245 points.
The general manager of the Central Bank, Guillermo Avellán, indicated that the country risk does not reflect the efforts that the Government has made to organize public finances, to reduce the fiscal deficit and indebtedness, but rather that “it currently responds to the political situation, to the uncertainty that was generated from the stoppages last June, which is why it is so important to reach minimum agreements that strengthen dollarization, that shield the economy to generate more sources of employment and achieve higher economic growth. This is how he held it this January 4 during a televised interview.
Why does Ecuador’s country risk continue to rise?
This indicator had started in 2022 at 869 points, but with the protests called by the Confederation of Indigenous Nationalities of Ecuador (Conaie) it began to climb in June and after four days of demonstrations it exceeded the barrier of 1,000 points, on the 29th -little before the dialogue tables were agreed to end the national strike- the country risk of Ecuador reached 1,210 and then it was the highest peak, but it continued to rise during the talks installed between the Government and indigenous people and in July it reached 1,600 points , it was precisely attributed to the uncertainty about the possible results of the dialogue tables and added to the fall in the price of crude oil and the change of Minister of Economy; then Pablo Arosemena replaced Simón Cueva.
But other factors continued to add up and on October 13 it reached its highest level recorded in all of 2022: 1,945 points. The war in Europe, the volatile oil markets, the forecasts made from abroad that a recession is coming that will hit the weakest economies, the political situation, everything came together to continue to rise that indicator that between rises and falls came at the beginning of November to be below the barrier of 1,500 points and on December 29 it reached 1,255, to drop since then to 1,250 on December 30, 2022 and to 1,245 on the first business day of January 2023.
Even the announcement to buy back debt affects the country risk approaching 2,000 points
This indicator measures the risk perception of a country regarding the payment of its international obligations and the cost of financing also depends on this.
The Central Bank calculated last September that the economic losses and the damages caused by the stoppages of June 2022 amounted to $1,115 million. (YO)
Source: Eluniverso
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