Economy grows by a surprising 3% in 2017 as consumer spending offsets reduced oil revenues

Ecuador’s Central Bank reported Friday that the economy grew by a strong 3 percent in 2017, almost double most projections. The bank said the growth was spurred by household spending, as well as an increase in exports and hydro electric power generation.

Exports of bananas rose sharply in 2017.

The growth offset a 2.6 percent drop in oil revenues due to OPEC-ordered production cuts.

The Central Bank credited increased consumer spending on growing confidence in government and the economy and the elimination of foreign import fees. Overall, household spending increased by 4.9 percent in 2017 over 2016.

The bank also reported strong growth in some export sectors, due primarily to the trade agreement with the European Union that went into effect in January 2017. Banana, coffee and cocoa exports rose by 6.3 percent, shrimp by 10 percent, and flowers by 20.9 percent.

Another growth factor was the increased generation of electricity as two new hydro electric power plants went on line. According to the bank, the additional power saved the government petroleum generation costs.

For the first time, Ecuador’s GDP exceeded the $100 billion mark, closing the year at $103 billion.

The Central Bank had projected growth of 2.1 percent while the International Monetary Fund (IMF) predicted 1.6 percent growth.