Central Bank raises 2017 economic growth forecast

An increase in household spending and optimism about the future have prompted the Central Bank (ECB) to raise its 2017 GDP growth forecast from 0.7% to 1.5%. If the forecast holds true, it means the economy will grow by 3% since 2016, when it fell 1.5%, and emerge officially from a two-year recession.

Central Bank President president Verónica Artola

Other factors for optimism, according to ECB, are the expectation among the business community that the 2016 real estate capital gains tax increase will be repealed in the February referendum and the continued rise in oil prices.

The ECB forecast is reinforced by recent comments from the International Monetary Fund which said Ecuador’s economy is in the recovery phase.

Ecuador Economic and Finance Minister Carlos de la Torre agreed with the ECB opinion and said a “favorable economic climate” is developing in the country. “When people consume more, companies produce more,” he said. “But the sense of optimism is also the result of serious and responsible management of the economy. We intend to continue this management.”

In an interview with Ecuador Public Radio, ECB President Verónica Artola said she sees signs that the real estate and construction sectors are poised for growth in 2018. “Home buyers are taking out mortgages again and the building trade is taking note of this,” she said. “These industries believe that private and public investment is coming and this is building trust for the future.”

She added: “We are seeing economic strength in many sectors and are very optimistic about the future.”