Análisis Económico sobre Ecuador por Focus Económics (mes de noviembre).

 Economic activity gained momentum in the third quarter, accelerating markedly in August thanks to a notable boost in oil production, following weak growth in H1. Prospects for the petroleum sector remain upbeat with USD 1.6 billion worth of private investment contracts signed on 5 October for the development of six oil fields. Moreover, the government has indicated plans to continue offering areas for oil and gas exploration through an auction later this year and next. Consultations have already ensued with neighboring Peru to jointly explore two oil fields at the border of the two countries. In addition, household consumption propelled by still-strong private credit growth in Q3 continued to power growth amid muted inflationary pressures.
• Cuts to public spending as the government attempts to strengthen its fiscal account are expected to drag on growth next year. Weaker private consumption dynamics, owing to a moderation in private credit growth and an expected rise in price pressures, will also likely weigh on the growth outlook. Tighter global financial conditions, meanwhile, pose downside risks, due to the dollarized economy’s heavy reliance on external financing. FocusEconomics panelists project GDP growth slowing to 1.1% in 2019, which is down 0.1 percentage points from last month’s forecast, and 1.4% in 2020.
• Inflation accelerated to 0.2% in September, after consumer prices on an annual basis declined 0.3% in August. Higher fuel and transport costs drove the swing into positive territory for the first time in 13 months. FocusEconomics panelists expect inflation to end 2019 at 0.9% and accelerate sharply to 2.7% by end of 2020.
REAL SECTOR | Economic activity grows at the swiftest pace in nearly four years in August According to the monthly economic activity indicator (IDEAC, Indice de Actividad Económica Coyuntural) released by the Central Bank of Ecuador, economic activity accelerated in August, growing 5.3% over the same month of the previous year, after expanding 4.0% year-on-year in July. August’s print marked the fastest pace of growth since October 2014. A boost in oil production underpinned the pick up in activity.
In month-on-month, seasonally-adjusted terms, economic activity rose to a four-month high of 0.8% in August following a 0.6% upturn in July.
Panelists participating in the LatinFocus Consensus Forecast expect the economy to grow 1.1% in 2019, which is down 0.1 percentage points from last month’s projection. For 2020, the panel sees economic growth rising to 1.4%.
MONETARY SECTOR | Consumer prices rebound in September Consumer prices rose 0.39% over the previous month in September, following a 0.27% month-on-month increase in August. Nine of the 12 sub-components registered higher prices; meanwhile, three of them saw a decline in prices. Prices for transport and communications increased the most while prices for clothing and footwear fell the most.
On an annual basis, consumer prices returned to growth for the first time in over a year. Inflation came in at 0.2% in September following a 0.3% annual decline in consumer prices in August. As a result, the annual variation in consumer prices inched up to minus 0.3% in September from minus 0.4% in August.
Panelists participating in the LatinFocus Consensus Forecast expect inflation of 0.9% at the end of 2019, which is down 0.5 percentage points from last month’s estimate. The panel projects inflation accelerating to 2.7% at the end of 2020

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