Although Ecuador’s GDP growth of 3.8 percent for 2014 fell short of predictions, the country’s economy still performed better than most Latin American countries, which averaged 1.1 percent growth.
The only countries showing higher growth rates than Ecuador in 2014 were Colombia, Bolivia, Dominican Republic, and Panama
The government had predicted 4 percent growth but said the 3.8 percent growth was still “exceptional” considering the steep drop in oil prices. The 3.8 percent GDP growth was the slowest in Ecuador since 2010, when the country had a 3.5 percent growth rate.
Ecuador, which is the seventh largest economy in South America, depends on oil for about half its export revenue, and saw prices drop by 50 percent at the end of 2014 from a June high of $98.90 a barrel. In response to loss of revenue, the government announced a series of wage cuts for public employees and a reduction in some public projects.
Maintenance on Ecuador’s biggest oil refinery starting in July cut local fuel output by 48 percent last year and forced the government to spend more on subsidized gasoline and diesel imports to meet demand, the central bank report showed.
Ecuador was also hurt by a stronger U.S. dollar, which it adopted as its official currency in 2000. During his weekly television address on Saturday, President Rafael Correa pointed out the strong dollar depressed revenue from exports.
However, the country’s non-oil industries, like agriculture, shrimp farming and electrical output, helped underpin growth, he said.
With oil prices hovering close to six-year lows, economists expect Ecuador’s growth to slow further this year, to 2.2 percent, according to the median forecast of six analysts surveyed by Bloomberg News from March 13 to March 18.