Increase in government spending by 6.4% and household spending by 4.3%; With gross fixed capital investment (FKBF) of 3.8%, the main causes that fueled the growth of the Ecuadorian economy was 3.3% in the second quarter of 2023 (May to June), compared to the same period of the previous year. year, according to the latest report on the results of the National Accounts of the Central Bank of Ecuador (BCE).

Growth will be 1% for Ecuador in 2023, according to Citi, which also expects a brief contraction of the region’s economy

The increase in government spending was mainly related to the purchase of goods and services, as well as the payment of salaries in the health and education sectors, reflected the ECB report, which also indicated that the growth in household consumption was driven by an increase in remittances and consumer credit.

Furthermore, the positive business of FBKF is reflected in the increase in the procurement of machinery and transport equipment, as well as the growth of the construction sector.

Meanwhile, if these results are compared with those of the first quarter of the year, from January to March, it also reflects a growth of 2.5%. This result is mainly explained by the increase of FBKF by 7.6%, government spending by 3.5%, exports by 3.3% and household consumption by 2.5%. In addition, imports increased by 2.1%.

Last March, the Central Bank revised down the country’s economic growth forecast for 2023. The forecast went from 3.1% to 2.6%. A decrease in exports, especially oil exports, the winter season, as well as possible problems with stoppages that discourage possible investments and population consumption, are the main reasons cited by the entity.

Central bank revises Ecuador’s growth target downwards, from 3.1% to 2.6%, due to falling exports and risk of stagnation

Meanwhile, in the second quarter of the year, imports recorded an increase of 6.2%, driven by the purchase of machinery, electrical equipment, basic chemical products and transport equipment. On the other hand, exports recorded a slight year-on-year decrease of 0.2%, due to a decrease in foreign sales of oil, processed fish, and metallic and non-metallic minerals.

At the industry level, 15 out of 18 sectors recorded a positive performance during this period. Among the activities that recorded the highest year-on-year growth are:

The ECB reported that the national accounts results corresponding to the second quarter of 2023 will be the last period in which the fixed base from 2007 will be used. Starting with the next national accounts publication, the results will be presented using a rolling base, which will include a wider source of statistical indicators and will reflect the latest economic structure of the country. These results will be published as determined in the statistical calendar of the Central Bank of Ecuador.