Economic growth forecasts for Ecuador bring the country closer to 3% by 2023

By Sebastián Osorio Idárraga

This week, the International Monetary Fund (IMF) delivered a new set of forecasts for Latin American economies and the region, revising some countries’ performance downward.

The international body forecasts an economic slowdown for the region from 4.0% in 2022 to 1.6% in 2023, revising downward from the 1.8% forecast last January.

“The price pressures that accompanied buoyant economic activity last year now appear to have peaked, but core inflation remains at persistently elevated levels, disproportionately hurting low-income households,” the agency said.

For Ecuador, justly a slight downward revision, setting GDP growth for 2023 at 2.9%, down from 3.0% in January, while inflation for the same period would be 2.3%.

According to this latest forecast report, Ecuador would be among those with the highest economic expansion this year in South America, being only behind Venezuela (5.0%) and Paraguay (4.5%).

In comparison, the other countries will grow by 2.4% or less, and Chile will have a contraction of -1.0%.

WHAT ARE THE OTHER PROJECTIONS?

The IMF’s stance on the South American country is more optimistic than that of Ecuador’s own Central Bank, which in its latest revision, projected GDP growth of 2.6% this year, lower than the 3.1% forecast.

Likewise, the latest World Bank (WB) forecast, published in the first days of April, projected that the Ecuadorian economy would grow 3.0% in 2023, with a slight downward revision of 0.1% compared to the last revision.

William Maloney, head for Latin America at the World Bank, said that the drop in the GDP growth forecast was due to the reduction in domestic and foreign investment due to the economic slowdown in the country’s major trading partners.

Meanwhile, the Economic Commission for Latin America and the Caribbean (ECLAC) predicted growth of only 2.0% in Ecuador’s economy in 2023, a revision of seven percentage points below the previous year.

With information from Bloomberg