Ecuador’s government proposes US$31.5 billion budget for 2023, sees lower fiscal deficit

Ecuador’s government foresees a fiscal deficit of US$2.6 billion for 2023, lower than initially forecast for this year, and higher economic growth in the same period as part of the draft budget it sent to the Legislature, the Economy and Finance Ministry said Monday.

President Guillermo Lasso, a conservative former banker, foresees a budget of US$31.5 billion next year. In 2022, the government put forward a spending plan of $33.9 billion.

The spending plan is supported by an average crude oil barrel price of US$65 and a growth of the dollarized economy of 3.1%, the Ministry of Economy and Finance added.

“The government objective of sustainability of public finances is maintained in the Proforma; the fiscal deficit is reduced to US$2.6 billion from US$3.8 billion that were in the initial budget of 2022,″ it explained.

The government delivered the spending plan to the National Assembly, where Lasso does not have a majority, for approval within 30 days.

The government expects crude oil production to reach 188 million barrels in 2023.

Ecuador currently produces about 493,000 barrels per day (bpd), and Lasso intends to bring extraction levels to about 750,000 bpd by the end of his term in 2025.

Financing needs for next year stand at US$7.6 billion, down from the US$9.5 billion approved for 2022.

“The main source of financing for next year’s budget will continue to be multilateral lending agencies, which grant credits on beneficial terms for the country,” the statement said.

In the 2023 proforma, Lasso guarantees an investment plan for US$1.9 billion, and social protection programs for vulnerable families will total US$1.3 billion.

The overall social investment will total some US$15.3 billion, including increases in the health and education budgets, social security payments, and higher allocations to universities.

With information from Reuters