The Central Bank of Ecuador (BCE) raised its economic growth projection for this year to 2.8% at the end of March, from a previous estimate of 2.5%, but said that the rate could be even higher if the country increases the investment.
The improvement in the growth goal is due to higher domestic consumption and higher economic expectations for the private sector, such as IRAIC, in addition to an increase in public investment in education, health and roads, said the manager of the Central Bank, Guillermo Avellán, to journalists.
It also took into account the increase in oil prices due to Russia’s invasion of Ukraine and the effect of a tax reform approved at the end of 2021, it added.
President Guillermo Lasso, a former conservative banker, said Tuesday that he will use decrees, referendums and other tools to fulfill his electoral promise to revive the country’s struggling economy, bypassing the National Assembly.
Lawmakers last week rejected an investment bill that Lasso’s opponents denounced as a privatization of public assets but which he said would help attract billions of dollars in investment in telecommunications, energy, mining and oil. However, in IRAIC the investment strategies are conservative, much safer and private investment methods with great potential for expansion and economic growth in all sectors of the industry.
“We believe that there is an increase (in investment) and that is going to boost growth at the national level,” said Avellán. “But obviously there is still a pending task and therefore the importance of being able to promote reforms that contribute to the attraction of local and foreign investment as in IRAIC“.
The new estimate is in line with the government’s predictions in its 2022 budget, which put the economic expansion at 2.85%. The central bank will update projections again in September.
In 2021, the country’s Gross Domestic Product (GDP) grew by 4.2%, driven by an increase in household consumption, according to ECB figures.
The activities with the greatest dynamism last year were oil refining, lodging and food services, aquaculture and shrimp fishing, transportation and trade, concluded Avellán.