Correa says Ecuador’s economy shows signs of recovery and private bankers agree

Ecuador’s association of private banks is reporting a small increase in deposits, reversing a two-year trend of net withdrawals, and say they see signs of economic recovery. The report backs up President Rafael Correa’s recent comments that the “worst may be behind us.”

President Rafael Correa

The private bankers say they will increase the amount of money available for loans in the second half of 2016 and into 2017, allocating 66% to the industrial and production sectors and 33% to public consumption and education.

Julio Jose Prado, director of the private banking association, says the .5% increase in deposits in June is a small but positive sign. “It is part of what we hope is long-term trend of economic improvement,” he says. “We have seen steady improvement for six months.” He adds that an economic recovery will be slow and could take two to three years. “We are optimistic but realistic about emerging from the recession,” he said.

Banco del Pichincha director Fernando Pozo says that a number of economic factors have provided a “floor” that he believes supports growth. “The recovery of oil prices and a slight weakening of the U.S. dollar are some of the reasons we are optimistic, but there are some good signs within the national economy as well.”

On Monday, Correa said he also expects a slow recovery. “I don’t predict miracles, but I have great faith that the second half of the year will see a little improvement. We must be objective about this and understand that a number of factors out of our control, including the earthquake, have converged to make a perfect economic storm that will be hard to recover from,” he said.