The reduced attractiveness of investment is considered one of the reasons why the Ecuadorian economy is growing “slowly”, a reality not only present in the country, but also in all of Latin America, according to analyzes made on the basis of the report. ‘Related: Digital Technologies for Inclusion and Growth’ published by the World Bank in early October.

This document mentions that the region’s gross domestic product (GDP) will grow by 2% this year, which is slightly higher than the 1.4% forecast in June, but below other world regions and the 2.3% expected for the region 2.6% is predicted in 2024 and 2025.

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As for Ecuador, the World Bank states that the economy will grow by 1.3% in 2023 and predicts it will be 1.90% in 2024 and 2.20% in 2025. The Central Bank of Ecuador (BCE) predicts that for 2023 it will be 1.5%, according to the latest economic growth update.

The central office initially forecast growth of 3.1 percent for 2023, but in March it corrected it to 2.6 percent, and in September to 1.5 percent, and this is mostly influenced by the decrease in oil production due to the decision to stop the operation of Block 43 – ITT recorded in August at polling stations and possible effects due to the El Niño phenomenon. The growth forecast for 2024 would be 0.8%. Other organizations also mentioned adjustments in their growth forecasts, for example, Fitch Ratings’ estimate went from 1.6% to 1.4%, the Association of Banks of Ecuador (Assobanca) reported in its September macroeconomic bulletin.

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According to World Bank estimates, the country with the highest growth is Panama with 6.30%, and the country with recession is Argentina with -2.50%. Venezuela is not included in this list of 28 countries.

For the World Bank, growth rates at the level of Latin America and the Caribbean, similar to those of the decade of 2010, “are not sufficient to achieve the much-needed progress in terms of inclusion and poverty reduction”, therefore he believes that “countries must find ways to stimulate inclusion and growth, improving governance and creating social consensus” and mentioning that “digital solutions can be part of the answer”, as well as “the expansion of digital connectivity, combined with complementary policies, offers the possibility of creating more dynamic and inclusive societies.”

According to the World Bank’s chief economist for Latin America and the Caribbean, William Maloney, the data for the region may be “disappointing in the short term”, but in the long term there will be growth “a little slower, similar to what it experienced in the 2010s”. He points out that this situation linked to structural problems if the region is compared to emerging regions, requiring greater capital investment. “The pending reform program is still necessary and there is a lack of consensus on how to implement that program.”

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For the editor of the publication weekly analysis, Alberto Acosta Burneo, what the World Bank report does is recognize the reality of Latin America, which is persistently a region of low growth, and one of the reasons is precisely that it fails to attract investment, which is why there is reduced investment compared to other regions where there is accumulation capital.

And this panorama at the regional level is also that of Ecuador, where investment has also stalled, according to an analyst who indicates that overall investment in the economy is forecast to decrease this year and next, which in turn will disappear. because the country failed to create an environment or economic conditions attractive for investment.

He points out that the growth of 1.5 percent, which the Central Bank considers to be a significant drop compared to the original estimate of 3.1 percent. “He had to update that estimate because the economy is slowing, so growth this year would be just 1.5%, but by 2024 the ECB estimates an even bigger slowdown, growth would be just 0.8%.”

However, the World Bank gives a much more optimistic assessment in its report, and Acosta believes that the difference is that it makes its projections without considering major changes in economic policy, while the Central Bank includes more information, such as the closure of the Yasuní oil fields that should happen next year and therefore has a much lower valuation.

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According to Acosta Burne, the call is that Ecuador must accelerate structural transformations: “The country must be more attractive for investment, and to be more attractive for investment, the investment environment must be improved.”

On one side is the legal environment, legal and physical security, and on the other side is the economic environment, economic conditions that must be more competitive. He believes that markets should continue to be opened, procedures simplified, entry barriers to entry eliminated, labor legislation improved, tax legislation competitive and, above all, legislation that is favorable for investments.

“These are fundamental changes so that we can generate an environment that attracts investments, this is a major shortcoming of the Latin American region, it has not been able to transform itself into an attractive region for attracting investors,” he says.