In the first quarter, Ecuador’s economy grew at its weakest pace since the 2016 recession. The government is facing significant challenges in implementing a recently agreed IMF programme, while President Lenin Moreno’s popularity has plummeted following unpopular, but arguably necessary, spending cuts.
- Dollar appreciation and a tightening of global financing conditions would weaken Ecuador’s competitiveness.
- Short-term, the current account deficit will narrow, as rising oil prices support export growth and the slowdown weighs on import demand.
- Moreno’s diminishing popularity will exacerbate uncertainty around implementation of the IMF programme.