The Ecuadorian economy slowed down due to the stoppages of June 2022. The results of the national accounts presented by the Central Bank of Ecuador (BCE) show that the economy grew 1.7% in the second quarter of 2022 compared to the same period in 2021, and 0.1% compared to the previous quarter.
This slowdown occurred due to detrimental effects caused by the stoppages of last June. The figures for year-on-year and quarterly growth consider economic losses and the damages caused by the stoppages of June 2022, amounting to $1,115 million.
Of this number, $330 million correspond to losses and damages in the oil sector and $785 million to the non-oil sector.
In addition, of the total amount of damages and losses, $281.6 million were presented in the public sector and $833.8 million affected the private sector.
There were five sectors most affected by the stoppages:
- Energy and hydrocarbons with losses of $330 million.
- Trade with $318 million.
- Industry with $227 million.
- Agriculture with $80 million.
- Tourism with $56 million.
The Central Bank carried out an estimate of economic losses and damages with technical assistance from the World Bank, maintaining the same methodology used for the quantification of losses and damages of the 2019 national strike.
As a consequence of the events that occurred in June and other factors that affect economic growth, The Central Bank of Ecuador updated its growth forecast downwards for the year 2022 to 2.7%, which represents a reduction of 0.1% from the previous forecast, which was 2.8%.
As for the results of the second quarter of 2022, the quarterly variation of 0.1% was the result of contractions in government spending (-1.6%), gross fixed capital formation (-2.1%) and of imports (-4.1%); while household consumption increased slightly by 0.3% and exports grew by 2.6%.
On the other hand, the year-on-year growth of the economy responded to the increase in household consumption at 4.9%; of gross fixed capital formation, at 3.1%; and of government spending, at 2.4%. In relation to the external sector, the imports grew by 7.2% and exports contracted by 0.1%.
Household consumption, which represents more than 65% of the gross domestic product (GDP), was boosted by the increase in imports, remittances and consumer loans. For its part, the growth of gross fixed capital formation was based on the acquisition of machinery, transport equipment and furniture.
Additionally, the increase in government spending responded to the increase in salaries in the health and education sectors, and to the purchase of goods and services.
At the industry level, 13 of the 18 sectors registered a positive variation. Among the most relevant are:
- Aquaculture and shrimp fishing (20.3%).
- Accommodation and food services (7.9%).
- Communications (5.8%).
- Electricity and water supply (5.5%).
- Transportation (5%).
- Trade (4.3%). (YO)