Recently, Juan Carlos Holguín, the former chancellor of the Republic, admitted with a good dose of sincerity the failure of the government of President Guillermo Lasso, which was not able – he feels – to respond to the serious problems affecting the population, such as the growing violence and insecurity that grip the country; lack of dynamism in a slowing economy; growing corruption and the decay of institutions that today classify Ecuador as a failed state.

On the other hand, as if it were a parallel reality, Pablo Arosemena, Minister of Economy and Finance, says – without even blushing – that the Government will leave the engines of the economy running, betting on a greater effect in family consumption and the fiscal system – certainly non-existent – which only the ruling party manages to observe.

However, the Central Bank has made several downward adjustments to the realistic expectation of GDP growth during 2023. It started with 3.1% when formulating the proforma budget, then moved to 2.1%, 5% and currently stands at 1, 5%. This clear downward trajectory (worsening in 2024 with an estimate of 0.8%) clearly reflects the poor dynamics of the economy as aggregate demand is threatened as a result of the impact on domestic consumption, lack of investment, public spending carried out in dribs and drabs and the external sector which does not depend on oil and international market fluctuations.

For this reason, it is difficult to understand an economy with the engines running and a marginal level of foreign direct investment (FDI). During the first half of 2023, barely $106.6 million was recorded in this area, suggesting an annual total far below even the $832.5 million reached in 2022, a rather limited figure when compared to the levels of foreign investment achieved over the same period, at for example, in Colombia and Peru, where, according to ECLAC, direct foreign investments amounted to USD 16.869 million and USD 10.848 million, respectively.

(…) during the years 2024 to 2026, the total repayment of amortization and interest of internal and external public debt will increase…

Thus, the slogan “More Ecuador in the world and more world in Ecuador” was nothing more than a pre-election marketing phrase, without substance, like the president’s commitment to cause an investment shock of about 30,000 million dollars.

Added to this is the high country risk, currently with a rate of 18.55%, which limits the ability to access financing on reasonable terms. Let us not forget that President Lasso’s government started its administration with 714 country risk points; However, what has been confirmed during this period is the progressive deterioration of this indicator.

To this we must add that in the period from 2024 to 2026, the total repayment of depreciation and interest on internal and external public debt will increase significantly, which increases the financing needs of the general budget of the state, which is also affected by a permanent fiscal deficit.

The new government will get an economy with engines without electricity, almost shut down. (OR)