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Ecuador Country Risk Report Q2 2018

Ecuador Country Risk Report Q2 2018

Executive Summary

Core Views

Ecuador will emerge from a recession in 2017, reaching 1.1% growth, amid increased private consumption and oil export gains.


Executive Summary
Core Views
Key Risks
Chapter 1: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Growth Outlook
Economic Recovery To Slow In 2018
Ecuador's economic recovery will slow in 2018, as an import-driven spike in consumption fades and the government is forced to rein
in on spending. Structural weaknesses will prevent growth from returning to pre-recession levels as the government of President Lenin
Moreno attempts to adjust to a lower oil price environment
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORT FORECASTS
External Trade And Investment Outlook
Import Restrictions Will Safeguard External Balance
Ecuador will maintain a modest current account surplus in the coming years due to rising oil exports and import restrictions. The
Outlook on External Position
TABLE: CAPITAL AND FINANCIAL ACCOUNT BALANCE
TABLE: TOP FIVE GOODS IMPORTS IN 2014
TABLE: TOP FIVE GOODS EXPORTS IN 2014
Fiscal Policy And Public Debt Outlook
Fiscal Sustainability Will Require Further Cuts
Structural Fiscal Position
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
Chapter 2: 10-Year Forecast
The Ecuador Economy To 2027
Lower Oil Prices And Business Environment To Weigh On Growth
Ecuador will experience structurally slower growth over the coming decade, compared to the boom years of the commodities super
cycle. Fiscal constraints, amid global weakness in oil prices, will limit public spending and the role of the government in the Ecuadorian
4
Chapter 3: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
Plebiscite Will Propel Moreno Agenda
Ecuadorian President Lenin Moreno's struggle for control of the ruling AP party with former President Rafael Correa will ratchet up in the
coming months, fuelled by the ouster of Vice President Jorge Glas and a constitutional plebiscite in February 2018. The plebiscite will
likely give Moreno the political capital to wrest control from Correa and move forward with his reform agenda.
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Waning Support For AP Amid Weaker Economic Outlook
Ecuador's ruling AP party will struggle to maintain its grip on power over the coming decade amid weaker economic activity and
direction
Chapter 4: Operational Risk
Operational Risk
TABLE: OPERATIONAL RISK
TABLE: MAIN ACTIVE TERRORIST GROUPS
TABLE: POLITICAL VIOLENCE RISK
TABLE: MAJOR CONFLICT FLASHPOINTS
TABLE: BUSINESS RESPONSE TO CONFLICT RISK
Transport Network
TABLE: ROAD RISKS
TABLE: RAIL RISKS
TABLE: PORTS AND INLAND WATERWAYS RISKS
TABLE: AIR TRANSPORT RISKS
Chapter 5: BMI Global Macro Outlook
EM Growth To Accelerate In 2018 While DMs Plateau
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES ’ REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS ’ REAL GDP GROWTH, % y-o-y

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