Ecuador's economy will emerge from recession in 2017, reaching1.1% growth y-o-y amid increased private consumption and oil exportgains.
We expect Ecuador to post a modestly narrower current accountsurplus in 2017 as import growth outpaces that of exports.
President Lenín Moreno will likely attempt to change course on policiesput in place by his predecessor, Rafael Correa, in the comingquarters, widening the rift that has formed within the ruling AlianzaPais (AP) party.
Although Ecuador's fiscal deficit will narrow with rising oil revenuesand President Moreno's outlined fiscal consolidation efforts (outlinedin his four year budget), substantial expenditure cuts will be requiredto bring the government's finances to a sustainable level.
Major Forecast Changes
We have revised up out forecast for economic growth in 2017 to1.1%, from 0.1% previously.