Ecuador: 2015 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Ecuador

Resumen

Context: Article IV discussions with Ecuador were conducted on-site for the first time since 2007 (Annex I). After growing at an average of about 4 percent over the past decade-on the wave of high oil prices, a strong public investment agenda, and the anchor of full dollarization-the economy has been hit by significant external shocks since late 2014. The sharp decline in oil prices and significant real exchange rate appreciation have undercut exports and fiscal revenues. The authorities responded rapidly with a large fiscal adjustment, introduction of temporary import surcharges, and moderation of minimum wage growth. The economy is projected to contract in 2015 and growth to remain subdued in 2016, while medium-term potential has been revised down given prospects of lower investment and employment growth.