Ecuador’s economic growth will accelerate to as high as 5.1% next year, despite less revenue from the oil industry, and inflation is expected to slow to 3.2%, President Rafael Correa said.
Correa’s government expects to end this year with growth of between 3.7% and 4%, and on his weekly TV show the president said the 2014 forecast was for between 4.5% and 5.1%.
“Hopefully we’ll manage to reach the higher end, 5% GDP growth,” said the South American country’s socialist leader, who is also a US-trained economist.
Ecuador’s annual inflation rate eased to 1.71% in September, and the government says it is confident of beating its overall target of 3.93% for this year.
Correa said the forecasts for economic performance in 2014 would have been stronger, were it not for ongoing maintenance work that has stopped the Opec nation’s biggest oil refinery. A $750mn overhaul of the 110,000 barrel per day (bpd) Esmeraldas refinery began in September and is expected to take several months.
“Oil income fell again because of the stoppage of the refinery which we’re modernising,” Correa said. “They had to stop it for several months, and that cut domestic fuel sales.”
The president said next year’s budget deficit was expected to be around $5.275bn, higher than the $5.050bn deficit forecast for this year, and that it was fully funded.
Those finances, he added, were destined for infrastructure, education and health projects. He did not elaborate on next year’s spending plans, nor did he say how the deficit would be funded.
The government has said it plans to issue sovereign debt - perhaps this year or in the first quarter of 2014 - marking a return to international debt markets five years after defaulting on $3.2bn of sovereign bonds despite being able to pay.
Correa said Ecuador’s current level of indebtedness as a proportion of gross domestic product - 24% - was one of the lowest rates in the country’s history.
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