indicator of Ecuador’s debt closed the year 2021 at $62,376.13 million, this represents 59.18% of the gross domestic product (GDP). This indicator, calculated with a new methodology that has been applied since last July, measures the consolidated debt plus other obligations of the Non-Financial Public System and Social Security.
Thus, according to this indicator, the external debt as of December 2021 was $46,021.31 million; while the internal one reached $14,329.77 million. Added to these figures are other liabilities of $2,025.04 million.
This closure to December, which is practically the same as last November when the indicator was at 59.15%, revealing an increase of some $1,000 million in external debt, between November and December. External debt in November reached $45,025.57 million, while in December it was placed at $46,021.31 million. The increase is seen in the category of loans granted by multilaterals. According to Finance data, in December Ecuador received disbursements from the Inter-American Development Bank (IDB) for $700 million, while the Development Bank of Latin America (CAF) provided resources for $350 million.
The internal debt, on the other hand, decreased by some $700 million, going from $15,055.30 million in November to $14,329 million in December, while other liabilities also fell by more than $200 million, going from $2,266 million to $2,025 million.
On the subject of debt, Jaime Carrera, executive secretary of the Fiscal Policy Observatory (OPF), explained that after reviewing the debt bulletin, several inconsistencies are still found in the figures, which makes the data issued by Finance unreliable. He explained that significant decreases in debt are seen both in the closed budgets and in the debts of the decentralized autonomous governments. This makes no sense, since this type of onerous payment was not detected, nor does the State have enough liquidity to meet such payments. For Carrera, these inconsistencies have been dragging on for years. The expert expressed that there has always been a lack of coordination and lack of harmony between the figures carried out by the undersecretaries of the Budget, Public Financing, the Treasury and Government Accounting.
Meanwhile, the The Public Finance Planning Code (Coplafip) states in the Twenty-sixth Transitory Provision that in order to achieve compliance with the rule of debt and other obligations, The governing body of public finances must progressively reduce the indicator of public debt and other obligations up to 40%. This must be done according to a calendar until 2032. Thus, it must reach 57% of GDP until 2025, that is, in two more years. Towards 2030 it must reach 45% of GDP and finally reduce to 40% of GDP until 2032, and then stay at that indicator.
On the issue of debt, the Government has said that by 2022 it is not expected to contract debt in international markets, despite the fact that this possibility was considered at first. He has indicated that thanks to the high price of crude oil and good tax collection, this issue would be covered for the time being. On the other hand, President Guillermo Lasso has just returned from China where the renegotiation of the debt (some $5,000 million) with that country has been proposed.
Meanwhile, Carrera commented that the possibility of Ecuador lowering its debt levels to the parameters established by law, It depends on two important factors. The first is that there must be a consistent decrease in the deficit year after year and, on the other hand, there must be sustained growth for some years. (I)
Source: Eluniverso
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