The debt negotiations with China have already started with technical tables, before the visit of President Lasso

the national government These days it is already holding technical meetings with its Chinese counterpart to facilitate reaching agreements on various topics of interest, before the meeting of the leaders of both countries that will take place the following week. One of the issues to which President Guillermo Lasso will give them importance is the renegotiation of the debt with China and what the president himself has called the decoupling of crude oil from debts. This is so that Ecuador can dispose of that resource and sell it at market price and not with the affectation of at least $3.6 that is now produced.

According to the Minister of Economy and Finance, Simón Cueva, the visit of President Guillermo Lasso to China is an opportunity to continue advancing in the good relations that exist with the Asian country. The minister explained that China is a friendly country with which there are important issues such as access to markets for products such as bananas, shrimp, among others.

About The debt that Ecuador has against China recognized that it reaches almost $5,000 million and that they have relatively short terms for their maturities. In this sense, debt service for China is important for the country. He explained that of the almost $5,000 million, an amount of $2,000 million would be somehow tied to oil commitments.

Minister Cueva indicated that the meetings aim to advance as much as possible in the technical discussions so that when the meeting between presidents takes place, progress can be made in a more concrete way. Cave He declined to give details of the negotiations and the conditions, as he said they are in the middle of them.

Meanwhile, Cueva clarified that he will take advantage to clarify and ensure that financial issues are not aligned or separated from commercial oil contracts.

about the relationship with the International Monetary Fund (IMF) clarified that it is very positive and explained that the delay in the disbursement of $700 million that was expected in December 2021, and that now could arrive at the beginning of March, it has been due to exogenous factors, related to the pandemic and the omicron variant. He said that in addition, President Lasso’s trip to China has somewhat restricted the agenda. However, once the authorities are back, then the date for the visit of the mission of the IMF, which could be face-to-face or virtual, depending on the evolution of the pandemic.

In any case, he ratified, as President Lasso has already said, in the coming days A meeting of the World Bank board will be held through which a credit for $700 million will be approved.

Cueva explained that there is no imminent need to go out to international markets. It is that the needs are being covered with the placement of internal debt securities in the private financial system, the re-profiling of debt with China is also pending and there are credits from multilateral and bilateral level in the portfolio. Conversations have been held with the European Investment Bank and with entities from Japan and France. In any case, He said, this does not rule out the country’s intention to go to international markets as long as conditions allow it. This is to have a manageable country risk, so that the rates are not so high.

The minister highlighted the good result of the deficit of the General State Budget in 20201, which was better than expected and ended at 3.5% (about $3.7 billion). For the minister, both the significant rise in the price of crude oil and the better tax collection leveraged this better result. He also said that they have sought to lower spending, especially the permanent. Thus, he gave as an example a reduction of $440 million between 2020 and 2021. Within this item, most of the reduction focused on salaries, which were reduced by $375 million. He also stressed that this reduction has occurred even though the State has been assuming and fulfilling debts inherited from previous governments.

Previously, the minister reviewed the latest results of the Ecuadorian economy, which already shows signs of reactivation. For example, he talked about the recovery of formal employment with 350,000 new suitable jobs. Regarding poverty indicators, he said that they have improved the situation in the country, since 750,000 people have been lifted out of poverty. According to INEC calculations, people who have an income of $85 are within the poverty line in the country.

Credit growing by 10% and deposits by 15% are also a sign of the improvement in the economy.

Meanwhile, he assured that there has been a recovery in oil production, after the stoppage that occurred in December 2021 due to the effects of regressive erosion. He explained that the drop in oil income as a result of this problem, and that it was expected to manifest itself in 2022, could be less thanks to the rise in the price of crude oil and also to higher production.

He also highlighted the strength of the rinternational reserves that at the beginning of January stood at $8.3 billion. On this subject, he explained that these monies are not from the Government, but belong to third parties. Among them, they are endorsements for private bank deposits and also for public banks and other state entities. There have also been good results in terms of non-oil exports and an interesting growth in remittances.

Inflation in Ecuador although it has risen to 2%, is one of the lowest in Latin America, he indicated.