Ecuador: Selected Issues Paper and Analytical Notes

International Monetary Fund

No 2019/080, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper estimates Ecuador’s potential growth in the range of 1 3/4 to 3 percent. The lower estimate corresponds to an extrapolation of recent trends while the higher estimate could be achievable through the implementation of a reform agenda that addresses fiscal and competitiveness challenges of Ecuador. The paper also develops models to nowcast and forecast GDP to improve the accuracy of growth projections. The oil sector remains an important driver of economic activity; however, it is not as important as it once was. A simple growth accounting exercise is used to decompose Ecuador’s growth between production factors accumulation; capital and labor, and total factor productivity. The study shows that low total factor productivity is the reason behind Ecuador’s recent economic decline and has been a negative contributor to long-term growth. The paper also explores different vector autoregression models to identify the best one to forecast real GDP in Ecuador.

Keywords: ISCR; CR; Ecuador; debt; deposit; IMF debt statistics; opening EM account; term EM; EMBI spread; investment fund share; Oil prices; Currencies; Debt limits; Fiscal stance; Global (search for similar items in EconPapers)
Pages: 69
Date: 2019-03-20
New Economics Papers: this item is included in nep-mac
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