MercoPress. South Atlantic News Agency

Ecuador expects the economy to grow 3,1% next year following an 8,9% contraction

The central bank expects household spending and a rebound in remittances from abroad to lead the expansion, together with a likely rebound in oil exports

Ecuador’s central bank said it expected the country’s economy to expand by 3.1% in 2021, following an 8.9% contraction in 2020 due to a plunge in crude prices and the effects of the coronavirus pandemic.

In a report, the bank said it expected household spending and a rebound in remittances from abroad to lead the expansion, together with a likely rebound in oil exports, the main external source of revenue in Ecuador’s dollarized economy. Imports were also expected to grow some 3.2% next year.

“This is due to an improvement in the domestic economy’s dynamics,” the central bank said. The International Monetary Fund said last week that growth would gradually recover in the medium term, but that Ecuador should expect “significant uncertainty” around the future trajectory of the pandemic and global crude prices.

Ecuador’s cash-strapped government is currently awaiting the IMF board’s approval for the disbursement of a US$ 2 billion tranche of a US$ 6.5 billion financing arrangement signed in September.