Ecuador’s economy could grow between 1.5% and 2.2% in 2021: central bank

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Ecuador's economy could grow between 1.5% and 2.2% in 2021: central bank




FILE IMAGE. People walk the streets amid the coronavirus outbreak, in Guayaquil, Ecuador


© Reuters / SANTIAGO ARCOS
FILE IMAGE. People walk the streets amid the coronavirus outbreak, in Guayaquil, Ecuador


QUITO, Oct 12 (Reuters) – Ecuador’s economy could grow between 1.5% and 2.2% in 2021 due to the resources obtained from the International Monetary Fund and other multilaterals, which will help a gradual reactivation and greater coverage social for the population affected by the pandemic, said Monday the manager of the country’s central bank.

Ecuador faces liquidity problems due to low oil prices and the effects of the coronavirus pandemic, which will cause an economic contraction of up to 9.6% this year, according to central bank projections.

However, the agreement reached with the IMF for about 6.5 billion dollars, which includes a 27-month program with reforms in the tax, labor and social security areas, will be key to the country’s recovery, according to the government.

“According to the data we have as the Central Bank of Ecuador (BCE) we are estimating that by 2021 the economy could grow between approximately 1.5% and 2.2%,” said the entity’s manager, Verónica Artola , during an intervention in a commission of the National Assembly.

The central bank’s estimate is lower than the one proposed by the IMF for Ecuador, which projects a 4.8% recovery of the economy by 2021.

Ecuador expects for the remainder of the year revenues of some 7.15 billion dollars in loan disbursements from multilateral organizations, including the IMF, and from Chinese banks.

The Government has said that these resources will make it possible to cover back wages for public servants, debts with State suppliers and increase credits for medium and small companies, in order to sustain employment.

In addition, it hopes to expand the coverage of social programs with direct economic aid for the population affected by the pandemic.

(Report by Alexandra Valencia, Edited by Manuel Farías)

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