Friday, March 13, 2015
The future of dollarisation in a context of low oil prices.
Oil revenues have underpinned the popularity of President Rafael Correa's government by enabling spending on welfare, infrastructure and development that has boosted economic growth. The collapse of world oil prices has placed the dollar-denominated economy under severe strain and raised doubts about the future of dollarisation in Ecuador.
- The fiscal challenges the government is facing will provide the opposition with an opportunity to strengthen in 2015.
- The right will play on concerns over the management of the economy, the scale of public debt and the size of the state.
- The left will attack the government for failing to reduce Ecuador's reliance on oil and undertake wider and deeper reforms.