MercoPress. South Atlantic News Agency

Ecuador grew 6.5% in 2008; forecasts 2.5% in 2009

Ecuador President Rafael Correa said that his country’s economic growth in 2008, which according to the latest estimates was 6.5%, was among Latin America’s highest despite the international financial crisis -- and despite defaulting on a portion of the nation's international debt.

Ecuadorian President Rafael Correa said that his country’s economic growth in 2008, which according to the latest estimates was 6.5%, was among Latin America’s highest despite the international financial crisis that exploded in the last quarter of the year.

“The latest estimates from the Central Bank say that total growth in 2008 was 6.5% which is the highest in a long time” Correa said on his customary radio and television program.

Correa emphasized how well the economy performed in 2008 despite the downturn in the oil sector the country’s most important, for lack of investment by private companies operating in Ecuador.

He also said that if the oil sector were removed from the calculations, the Ecuadorian economy last year grew 7.95%, which would represent the highest surge since the 1970s when Ecuador enjoyed an “oil boom”.

But he said that even without applying that hypothesis, Ecuador’s economic growth was among the highest in Latinamerica, despite the downturn in the world economy during the final months of 2008.

However the government estimates that, because of the international crisis, the national economy will grow less than 3% this year, if international financial difficulties continue.

“We have managed the crisis pretty well and the effects are still minimal, thank God, but we’re still going to feel it,” above all in the employment sector, Correa said, who has applied a series of measures to minimize the impact of the crisis.

He recalled that at the beginning of the year he applied restrictions on imports to avoid balance-of-payment problems for the country, and undertook programs to stimulate domestic production and strategies to seek funding for regional credit organizations.

Despite those measures, he admitted that the crisis has caused some unemployment and because of that he recalled that this week he announced a plan to improve the labour situation, which aims to generate more than 80,000 jobs in the short term.

Meanwhile Economic Policy Minister Diego Borja confirmed that the country expects to grow 2.5% this year, slightly below expectations of a GDP increase of around 3%. He added that Ecuador's economy grew in line with expectations in 2008, or a strong 6.52%, thanks to public spending, Borja said. The minister pegged inflation at 7% for all of 2009.