Ecuador: macroeconomicEcuador: macroeconomic overview · Chile Ecuador Brasil Colombia Argentina Perú Paraguay ... Imports -17,600.7 -3,535.2 -3,428.1 -3.0% Consumption -4,037.4

Ecuador: macroeconomicEcuador: macroeconomic overview

October, 2009

Real SectorReal Sector

- GDP-Inflation-Unemployment

On January 2000, Ecuador adopted a dollarized monetary regime. Economic activity registered sustained average annual real growth rate of 4.8% during the

2000-2008 period. During 2008, GDP grew 6.5% on annual terms.

Gross Domestic ProductGross Domestic ProductAnnual growth rate %During the 2000-2008

growth was related to:i) 10.8% average 8 0) g

annual growth rate on Gross fixed capital

formation (GFKF), in part due to public 2 7

5.2 4.7

2 4

4.1

2.8

5.34.2

3.6

8.0

6.0

3.9

2 5

6.5

4.5

6.5

8.5

part due to public investment.

ii) 5.6% average annual growth rate on

2.71.5

0.3

1.72.4 2.1 2.5

‐1.5

0.5

2.5

annual growth rate on Private consumption.

iii) 5.1% average annual growth rate on ‐6.3‐7.5

‐5.5

‐3.5 Period average annual growth rate 2.7%

Period average annual growth rate 4.8%

Exports

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Source: Central Bank of Ecuador

During the 2000-2008 period, oil GDP registered average annual real growth rate ofDuring the 2000 2008 period, oil GDP registered average annual real growth rate of 2.1%. The increase on 2004 oil production is related to private production increases

result of the construction of the OCP pipeline. From 2005, oil GDP falls due to insufficient public and private investment.

Oil and Non-Oil Value Added *Annual growth rate

35.0

33 5

38.5

23.5

28.5

33.5 OIL VALUE ADDEDNON OIL VALUE ADDEDGDP

6.7

3 15.5

3.9 3.5 3.85.8 6.3

4.0

7.95.3 4.2 3.6

8.06.0

3.92 5

6.58.5

13.5

18.5

0.9 1.1

‐4.4

‐0.2

‐5.0 ‐5.17

3.1 3.52.8

3.6 2.5

‐6.5

‐1.5

3.5


‐10.05‐11.5

2000 2001 2002 2003 2004 2005 2006 2007 2008

As a result of the world crisis, during the Second Quarter 2009 GDP registered aAs a result of the world crisis, during the Second Quarter 2009 GDP registered areduction of 1.06% over the same period of the previous year. Oil Value Addedshows a decrease of 10.22% on annual terms (q/q-4) due to a significant reductionon the production of private companies.

Oil and Non Oil Value Added*Quarterly change annualized rate t/t-4.

9 87

14.50

0.59

2.78

5.25 5.40 5.443.89 3.85

2.34

3.33

6.387.56

9.879.05

5.41

2.91

0 31

4.834.08

4.89

1.81 1.631 14

1.38

5.806.53

8.28 8.01

3.39 1.514.50

9.50

0.59

‐4.52

‐1.29‐0.64

‐3.19

‐7 02

0.311.14

‐1.06

‐5.50

‐0.50

‐14.21

‐9.13

‐10.99

‐7.02

‐12.82

‐10.91‐10.22

‐15.50

‐10.50

OIL VALUE ADDED

NON OIL VALUE ADDED


‐18.34‐20.50

2006.I 2006.II 2006.III 2006.IV 2007.I 2007.II 2007.III 2007.IV 2008.I 2008.II 2008.III 2008.IV 2009.I 2009.II

GDP

On the other hand Non-oil Value Added shows an annual growth of 0.31% (q/q-4)On the other hand Non oil Value Added shows an annual growth of 0.31% (q/q 4)due to better results on the construction industry and the public administration.Industries such as trade, agriculture and oil refining registered decreases of 4.13%,3.04% and 7.17% respectively.

-2.31

-1.06

Other elements GDP

GDP

Gross Value Added by IndustryConstant prices t/t-4

2009-II

1.87

-6.24

6.68

2.09

-0.88

2.31

Other services

Services of financial intermediation

Public Administration

household

Total Added Value Gross

Other elements GDP

-1 11

5.95

-4.13

3.52

1.59

1.87

Electricity and water

Construction

Trade

Transport and storage

Financial intermediation

Other services

-3 04-0.10

-2.20

-1.08

-7.171.11

Agriculture ranching hunt and forestry

Fishing

Explotation of mines

Manufacturing industry (exclude oil)

Oil refining

Electricity and water


3.04

-9.50 -4.50 0.50 5.50 10.50

Agriculture, ranching, hunt and forestry

It is interesting to note that compared to other economies of the region, economicg p gactivity in Ecuador managed to grow during the last quarter of 2008 and firstquarter 2009.

Growth rates of GDP (t/t‐4)

6 00%

8.00%6.42%

Growth rates of GDP (t/t 4)2009.I ‐ 2009.II

2.00%

4.00%

6.00%

0.20%

3.39%

1.30%

4.05% 3.90%

1.51%2.04%

1.77%

‐4.00%

‐2.00%

0.00%

‐1.10%

‐2.30%‐1.80%

‐0.40%

‐4.10%4 50%

‐1.06%‐1.20%

‐0.50% ‐0.80% ‐1.09%

‐4.30%

‐6.00%Chile Ecuador Brasil Colombia Argentina Perú Paraguay

2008.IV 0.20% 3.39% 1.30% ‐1.10% 4.05% 6.42% 3.90%

2009.I ‐2.30% 1.51% ‐1.80% ‐0.40% 2.04% 1.77% ‐4.10%

2009.II ‐4.50% ‐1.06% ‐1.20% ‐0.50% ‐0.80% ‐1.09% ‐4.30%

‐4.50% 4.30%

Sources : Central Banks of respective countries.

On August of the present year, CPI registered a monthly decrease of -0.3% for the g p y , g yfourth consecutive month, due in part to lower prices on agricultural products as a

result of favorable market supply. Annual inflation shows a deceleration, reaching only 3.3% on august, lower than the 10.8% registered on august 2008.

A l M hl d C l i I fl iAnnual, Monthly and Cumulative Inflation

10.02%

9.50%10.00%10.50%11.00%

7.94%

6 00%6.50%7.00%7.50%8.00%8.50%9.00%9.50%

Monthly Inflation

Cumulative Inflation

Annual Inflation

%3.33%3.00%

3.50%4.00%4.50%5.00%5.50%6.00% Annual Inflation

0.21%

0 30%

2.48%

‐0 50%0.00%0.50%1.00%1.50%2.00%2.50%

Sources : INEC y BCE

‐0.30%0.50%

jan‐07

Feb‐07

Mar‐07

apr‐0

7May‐07

Jun‐07

Jul‐0

7au

g‐07

Sep‐07

Oct‐0

7No

v‐07

dec‐07

jan‐08

Feb‐08

Mar‐08

apr‐0

8May‐08

Jun‐08

Jul‐0

8au

g‐08

Sep‐08

Oct‐0

8No

v‐08

dec‐08

jan‐08

Feb‐09

Mar‐09

apr‐0

8May‐09

Jun‐09

Jul‐0

9au

g‐09

Tradable goods show a monthly decrease on its CPI of -0.41% (lower prices of g y ( pagricultural and industrial products), while non-tradable goods show a monthly

decrease on its CPI of -0.15%.

Inflation of Tradable and Non Tradable GoodsInflation of Tradable and Non-Tradable Goods

1.9%2.1%2.3%2.5%

Monthly

Tradable

0 34%0.9%1.1%1.3%1.5%1.7%

Tradable

Non Tradable

0.2%

0.34%

0.04% ‐0.15%‐0.1%0.1%0.3%0.5%0.7%

‐0.30%

‐0.41%‐0.7%‐0.5%‐0.3%

n‐07

b‐07

r‐07

r‐07

y‐07

n‐07

ul‐07

g‐07

p‐07

t‐07

v‐07

c‐07

n‐08

b‐08

r‐08

r‐08

y‐08

n‐08

ul‐08

g‐08

p‐08

t‐08

v‐08

c‐08

n‐09

b‐09

r‐09

r‐09

y‐09

n‐09

ul‐09

g‐09

Sources : INEC y BCE

jan

Feb

Ma ap Ma y Jun

Ju aug

Sep

Oc

No v dec

jan

Feb

Ma ap Ma y Jun

Ju aug

Sep

Oc

No v dec

jan

Feb

Ma ap Ma y Jun

Ju aug

D it f th ld i d fi i l i i l t t d i thDespite of the world economic and financial crisis, unemployment rate during thesecond quarter of 2009 was still on the one digit range

L i A i l II Q 2009 Ad d E i II Q 2009

7.85Venezuela 8.37OECD

Latin America unemployment – II Quarter 2009 Advanced Economies– II Quarter 2009

8.3

5.17

7.98

Ecuador

México

Uruguay

5.19

3.9

8.9

Japan

Korea

UE 27

8 62

10.7

11.72

B il

Chile

Colombia

9.36

8.42

5.19

United States

Canada

p

Sources : Central Banks, Statistics Institutes, Eurostat, OECD, OIT

8.62

0 2 4 6 8 10 12 14

Brasil 18.7

0 5 10 15 20

Spain

External SectorExternal Sector

- Balance of Payments-Current Account-Trade Overview

Balance of Payments (USD Millions)

External sector has beenaffected the most by the world

2008 2008.I 2009.I % of change1 CURRENT ACCOUNT BALANCE 1,174.7 1,288.7 -817.0

Goods 1,371.3 1,207.5 -734.8

Trade account (registred trade) 909.9 1,087.5 -805.5Exports 18,510.6 4,622.7 2,622.5 -43.3%affected the most by the world

crisis, registering a currentaccount deficit of USD 817

million during the first quarter of th hil d i th

Crude oil and derivatives 11,672.8 2,964.2 1,011.9 -65.9%others 6,837.8 1,658.5 1,610.7 -2.9%

Imports -17,600.7 -3,535.2 -3,428.1 -3.0%Consumption -4,037.4 -823.7 -772.6 -6.2%others -13,563.3 -2,711.5 -2,655.5 -2.1%

Non Registered Trade and Others 461.5 120.0 70.7 -41.1%Non factor services -1,587.1 -340.6 -323.2 -5.1%

the year while during the sameperiod of 2008 Ecuador

registered a USD 1289 millionsurplus.

Credits 1,369.6 319.9 323.1 1.0%Debits -2,956.7 -660.5 -646.3 -2.1%

Factor Services -1,598.2 -395.5 -310.9 -21.4%Credits 187.0 64.1 13.0 -79.8%Debits -1,785.2 -459.6 -323.9 -29.5%

Transfers 2,988.6 817.3 551.9 -32.5%o/w remittances 2 821 6 759 6 554 5 -27 0%p

Most affected areas wereexports (43.3% annual

decrease) basically oil exports

o/w remittances 2,821.6 759.6 554.5 27.0%

2 CAPITAL AND FINANCIAL ACCOUNT -339.5 -628.1 -571.0 -9.1%Capital Account 32.9 4.8 4.9 2.5%Financial Account -372.4 -632.9 -575.8 -9.0%

Foreing Direct Investment 993.2 426.1 116.1 -72.7%Inversión de cartera (neto) 213.1 102.2 -188.1 -70%Other Investment (1) -1,578.8 -1,161.2 -503.9

decrease) – basically oil exportswith 65.9% annual decrease and remittances with a 27% annual

decrease.

3 ERRORS AND OMISSIONS 112.9 15.5 53.7GLOBAL BALANCE OF PAYMENTS (1+2+3) 948.1 676.1 -1,334.2

FINANCING -948.1 -676.1 1,334.2 Net Foreing Assets in Central Bank (2) -952.2 -622.7 1,229.0Exceptional Financing (3) 4.1 -53.4 105.2

Notes:1/ It refers to the movement of public and private debt2/ It referes to the change in Free Disponsable Reserve (-) means increase3/ Include debt forgiveness, arrears y arrears payments

Current account evolution starts to deteriorate on the last quarter of 2008. TradeCurrent account evolution starts to deteriorate on the last quarter of 2008. Tradebalance went from registering surpluses during the first semester of 2008 to sharp

deficit on the last quarter of 2008 and the first quarter 2009. Nevertheless, during thesecond quarter of the present year, both current account and trade balance show a

li htCurrent Accpunt and its Components

Millions of USD

slight recovery.

654 711 762 801676

771 815 826 760 712 707 644555 609.7

1,289 1,343

400

900

1400

-799 -823 -803 -829 834 -825 864-736

-821 836 -792-634

-600

-100

400

799 -823 803 -829 -834 -825 -864 -895-821 -836

-1600

-1100

2006

.I

2006

.II

2006

.III

2006

.IV

2007

.I

2007

.II

2007

.III

2007

.IV

2008

.I

2008

.II

2008

.III

2008

.IV

2009

.I

2009

.II

Source : Central Bank of Ecuador

Factor and Non Factor Services RemittancesCurrent Account Trade Balance (registered trade)

The world crisis on developed countries that have a significant percent of ecuadorianp g pworkers, such as Spain and United States, severly affected remittances since thesecond semester of 2008. On march 2009, remittances reached only USD 555

million, the lowest ammount registered during the last three years (equivalent to anannual decrease of 27%) However it is important to note that during the secondannual decrease of 27%). However, it is important to note that during the second

quarter of 2009, remittances show a slight recovery when reaching USD 610 million. Recieved Remittances

USD millionsUSD millions

801

771

815 826

800

900

1,000

654

711

762

676

771 760

712 707

644

555

609.7600

700

800

400

500

300

2006

.I

2006

.II

2006

.III

2006

.IV

2007

.I

2007

.II

2007

.III

2007

.IV

2008

.I

2008

.II

2008

.III

2008

.IV

2009

.I

2009

.II


Foreign Direct Investment reached USD 116 million during the first quarter ofForeign Direct Investment reached USD 116 million during the first quarter of 2009, registering a decrease of USD 310 million compared to the previous year,

mostly as a result of lower investment in the oil sector.

Foreign Direct InvestmentUSD millions

256.4 260

160

210

2.3

37.3

5.7 23.3

53.7 47.9

1 7

72.0

36.7

8.8 10.6 15.2 20.9

10

60

110

Agriculture, ranching, hunt and forestry

Explotation of mines

Manufacturing industry

(exclude oil)

Electricity and water Construction Trade

Services provided to businesses

2008 I 1/ 2 3 256 4 37 3 5 7 23 3 53 7 47 9

2.3 1.7

-40

10


2008-I 1/ 2.3 256.4 37.3 5.7 23.3 53.7 47.9 2009-I 1/ 1.7 72.0 36.7 8.8 10.6 15.2 20.9

Unlike previous years, as of July 2009, total trade balance registered a deficit ofUSD 681 million, associated mainly to a lower surplus on the oil trade balance due tolower oil prices (55.9% annual decrease) as well as lower exports volume (8%annual decrease)

Deficit on non oil trade

Trade BalanceUSD Millions

12000Total Oil Non Oil Deficit on non-oil trade

balance is lower in USD 775 million to the deficitregistered during 2008

5321449

1414910 1154

25404155

51645750

8455

3186 2892

6204

22082000

4000

6000

8000

10000Total Oil Non Oil

g gas a result of a contraction on

consumption and rawmaterials imports

532 910 1154 677

‐681

‐3623‐3715

‐4336

‐2032 ‐2215

‐3663‐2889

‐6000

‐4000

‐2000

0

2000

materials imports. ‐7545

‐10000

‐8000

2005

2006

2007

2008

Jan‐Jul 06

Jan‐Jul 07

Jan‐Jul 08

Jan‐Jul 09


Despite of the crisis, total trade balance finally shows some signs of recoveryDespite of the crisis, total trade balance finally shows some signs of recoveryduring the last months, mainly as a result of lower oil and non-oil imports as well as

higher oil export prices

Monthly Trade BalanceMonthly Trade BalanceJan 2008 – Jul 2009

USD Millions

1 300

Total Oil Non Oil

582708

292

846858

646

882

1,189

901881

773627

425307

157 151243

340 383516

417300

800

1,300

298208

277 175

87

‐219

536

‐408‐555‐414

‐238 ‐153

5‐16

11421

120157 151 340

‐547

‐276

‐438

482‐390 ‐396

‐335‐398

‐402‐396

‐200

300

‐536‐605

‐482‐609

‐705 ‐686

‐845‐961

‐715 ‐675‐571

‐1,200

‐700

Jan‐08

Feb‐08

Mar‐08

Apr‐08

May‐08

Jun‐08

Jul‐0

8

Aug‐08

Sep‐08

Oct‐08

Nov‐08

Dec‐08

Jan 09

Feb 09

Mar 09

Apr 0

9

May 0

9

Jun 09

Jul 0

9


M M A N M M

During the first seven months of 2009, oil exports reached USD 3330 million, compared toUSD 7958 million during the same period of 2008, equivalent to a 58.2% decrease. However,during the last months levels have started to recover.

Oil ExportsJanuary - July

Growth rates2007 2008 2009 Jan-Jul 08 Jan-Jul 09

OIL EXPORTS

Value (USD millions) 4,213 7,958 3,330 88.9% -58.2%Volume (millions of barrels) 81.2 84.2 77.6 3.7% -7.8%Unit value (USD/barrel) 51 9 94 5 42 9 82 1% 54 6%Unit value (USD/barrel) 51.9 94.5 42.9 82.1% -54.6%A. Oil Crude

Value (USD millions) 3,778 7,298 2,959 93.2% -59.5%Volume (millions of barrels) 72.4 75.9 69.8 4.8% -8.0%Unit value (USD/barrel) 52.2 96.1 42.4 84.3% -55.9%

B Derivados de PetróleoB. Derivados de PetróleoValue (USD millions) 435 660 371 51.5% -43.7%Volume (millions of barrels) 8.8 8.3 7.8 -5.3% -6.2%Unit value (USD/barrel) 49.6 79.4 47.6 60.0% -40.0%


Eventhough non-oil exports continue to fall due to less dynamic behavior of non traditionalEventhough non-oil exports continue to fall due to less dynamic behavior of non traditionalexports (5.4% reduction on annual terms during the first seven months), during the lastmonths of the year traditional exports show some signs of recovery.

Non-Oil ExportsUSD millions

6,8387,000

8,000

Non Traditional Exports

3,946

5,184

5,993

5,000

6,000

Non Traditional Exports

Traditional Exports

Non Oil Exports

1,879 1,845

2,305

2,984

3,546

2,275 1,9332,778

2,981

3,616 3,519

4,230

2,900

3,380

3,9903,776

3,000

4,000

1,364 1,4811,737 1,674

1,9252,200

2,4472,892

1,273 1,4041,715 1,844

1,4151,500

1,627

1,976

1,000

2,000


02001 2002 2003 2004 2005 2006 2007 2008 (p) Jan-Jul 06 Jan-Jul 07 Jan-Jul 08 Jan-Jul 09

During the period January-July, total imports reached USD 7771 million, of which non-oil importsare USD 5710 million, 12.9% less than the same period of 2008. During the period, there is a sharp generalized reduction on imports : i) non durable consumption (-16.4%) ; ii) durable consumption (-17.8%); raw materials (-16.9%); and capital goods (-2.9%)

Total ImportsFOB USD millions

9,000

10,000

2,045

Consumption Raw Material Oil Derivatives Capital Goods

5,000

6,000

7,000

8,000

2,276

3,1952,655

1,507

,

1,698

40.3%

35.7%

-16.9%

-16.9%

0

1,000

2,000

3,000

4,000

1,804 2,345 2,276

1,3211,754 1,122

30.0%

-36.0%

-2.9%

32.8%

0Jan-Jul 2007 Jan-Jul 2008 Jan-Jul 2009


FISCAL SECTOR- Non Financial Public Sector

|(NFPS)- Central Government (CG)- Financing of the Central G tGovernment

During the first semester of 2009 and as a result of the drop on international oil prices,During the first semester of 2009 and as a result of the drop on international oil prices, the Non Financial Public Sector (NFPS) revenues fell by 21.3% and expenditures grewby 6.8% on annual terms. Global result is a deficit of 2.4% of GDP, compared to global

surplus of 2.8% of GDP registered during the same period of 2008.

Operations of the NFPSJanuary – June (prov.)

10169

92311000011000

86428006

9231

6000700080009000

10000

nes

15272000300040005000

USD

mill

on

-1225-2000-1000

01000

Total revenues Total expenditures Global Surplus or

Source: Ministry of Finance and NFPS Institutions

Total revenues Total expenditures Global Surplus or Deficit

2008 2009

Revenues of the NFPS

Revenues during the firstsemester of 2009 have been

January-June (prov)

2008 2009 Absolute Relative

Total revenues 10169 8006 -2163 -21.3

USD millions Variation

semester of 2009 have beenmainly affected by:

i) Fall of 59.9% on oilrevenues

Oil revenues 4654 1868 -2786 -59.9Non Oil revenues 5307 5703 396 7.5Taxes revenues 3276 3759 483 14.7Contributions to the Social Security 888 820 -67 -7.6revenues

ii) Fall of 7.6% of Social Security Contributions

iii) Increase of 14.7% of taxSource: Ministry of Finance and NFPS Institutions

Others 1143 1124 -19 -1.6

Operat. surplus Non Finacial PublicEnterprises

208 435 226 108.5

revenuesiv) Increase on 108.5% on

Operational Surplus of the Public Companies

Taxes revenues; 47%

Contributions to the Social Security; 10%

Others; 14%

y

p

47% of the NFPS revenues come fromTax Revenues and 23% from Oil

Operat. surplus Non Finacial

Public Enterprises;

5%Tax Revenues and 23% from OilRevenues.

Oilrevenues; 23%

5%

Expenditures of the NFPS *J J ( )January-June (prov)

Expenditures during the first2008 2009 Absolute Relative

Total expenditures 8642 9231 588 6.8


semester of 2009 have beenmainly affected by:

i) Increase of 5.8% on total t dit

Current expenditure 6098 6454 356 5.8Interest 391 184 -207 -53.0Wages and salaries 2074 2595 521 25.1Purchase of goods and services 814 931 118 14.5Benefits of Social Security 556 758 202 36.4Other 2265 1986 278 12 3current expenditures

ii) Increase of 9.1% oncapital expenditures

iii) Fall of 53% on interest

Other 2265 1986 -278 -12.3

Capital expenditure and net loan 2544 2777 233 9.1

#¡DIV/0!Global Surplus or Deficit 1527 -1225 -2752 -180.2

iii) Fall of 53% on interestpayments due to lowerdebt levels (global bonds)

Other; 22%Capital

expenditure ; 30%


70% of the NFPS expenditures are current expenditures while 30% are capital and investment expenditures Interest; 2%

Purchase of goods and

Benefits of Social

Security; 8%

(*) Expenditures are on a accrual basis.

p p

Wages and salaries; 28%

services; 10%

The deficit of the NFSP during the first semester 2009 is financed basically by a reduction ond it f th fi i l t d i l t d b di b t

Financing of the NFSP USD millions

deposits of the nonfinancial sector and in a less extend by new disbursements.

J j2008 2009 (prov)

Overall Balance 1,527 -1,225

a. Surplus (-) or Deficit (+) (d+e) * -1,527 1,225

January‐june

b. Amortization 687.3 929.4 Domestic 10 0 External 678 929

c. Disbursements 136 165Domestic 5 0 Domestic 5 0

Foreign 130 165 Projects financing 130 165 Multilaterals 0 0

d. Total financing ( c-b) -552 -764

O h fi i ( 1 2 3 4) 975 1 989e. Other financing sources ( 1+2+3+4) -975 1,989 1. Deposits variation of NFPS in Central Bank -2,776 1,236 2. Deposits variation of NPFS in Finacial Institutions. -69 68 3. Assets variation: FEIREP CEREPS y FAC 1,183 119 4. Arrears variation 687 566

o/w Domestic 756 431 o/w Domestic 756 431 External -69.3 135

*/ negative sign means surplus


During the first semester of 2009 the Central Government revenues the NFPS mostDuring the first semester of 2009 the Central Government revenues, the NFPS mostsignificant governemnt level, reached 9.7% of GDP, while the expenditures 11.9% of

GDP. As a result, the Central Government registered a deficit of 2.3% of GDP in contrast with the 1.1% of GDP surplus registered during the same period of 2008.

Operations of the NFPS and the Central GovernmentJanuary-June 2009

8,006

9,231

9,000

10,000

8,006

4,982

6,139

5,000

6,000

7,000

8,000

illio

n

1,000

2,000

3,000

4,000

USD

m

-1,225-1,157

-2,000

-1,000

0

Revenues Expenditures Global Surplus

Source: Ministry of Finance

NFPS CG

Central Government RevenuesJanuary–June (prov.)

The decrease on the Central 2008 2009 Absolute Relative

Total revenues 6 473 4 982 -1 492 -23 0


Government revenues during this first six months of 2009 (23% annual terms) is a result of the significant drop

Total revenues 6,473 4,982 -1,492 -23.0

Petroleum revenues 2,569 724 -1,846 -71.8

Nonoil income 3,475 3,996 521 15.0

Taxes revenues 3,161 3,646 485 15.4result of the significant drop in oil prices and oil revenues.

On the other hand, despite de world crisis tax revenues


Nontax 315 350 35 11.2

Transfers 429 262 -166 -38.8

de world crisis, tax revenues grew by 15,4% as a result of i) important economic activity during the previous year ii) 2008 Tax Reform iii) Increased efficiency in tax collection.

It si important to note that legal changes made on 2008 eliminated oil funds and since april 2008

all oil revenues go directly into the Central Govermemnt BudgetGovermemnt Budget.

Total expenditures increased by 4 9% due to an increase of 9 4% on currentTotal expenditures increased by 4.9% due to an increase of 9.4% on currentexpenditures. Capital expenditures, that by law must be financed by oil revenues,

decreased in 2.9%. As a result there is a deficit of USD 1157 million in contrast withthe USD 620 million surplus of the previous period.

Central Government ExpendituresJanuary – June (prov.)

2008 2009 Absolute Relative

Total expenditures 5,853 6,139 286 4.9

USD million Variation

Currents 3,712 4,059 347 9.4

Wages and salaries 1,664 2,135 471 28.3Current transfers 870 824 -46 -5.3Good and services 248 363 115 46.4Other current expenditures 505 497 -8 -1.6Interests 425 240 -185 -43.5

Capital 2,142 2,080 -61 -2.9

Global Deficit (-) or Surplus (+) CG 620 -1,157 -1,777 -286.7


G oba e c t ( ) o Su p us ( ) CG 6 0 , 57 ,777 86.7

MONETARY AND FINANCIAL SECTOR

M i B l A f h- Main Balance Accounts of the Central Bank of Ecuador

- Deposits and LoansNonperforming loan ratio- Nonperforming loan ratio

- Lending rates.

Main Balance Accounts of the Central Bank

Between December 2008 andSeptember 30 2009, the NetForeing Assets of Central Bank

Main Balance Accounts of the Central BankUSD millions

gincreased by USD 152 milliondue mainly to: i) Disbursementsof FLAR (Latin American ReserveFund) of USD 480

AbsoluteAnnual Change

31-Dec-2008 30-Sep-09 30 Sep.09/31 Dec.08(a) (b) (c)=(b)-(a)

BALANCE

)million, Petrochina of USD 1000millIon ii) Allocation of SDR’sequivalent to USD 352 million.

This positive inflows were

Net Foreing Assets of Central Bank 4,473 4,625 152

DEPOSITS OF THE SPNF (1+2) 3,720 4,381 662

1. Central government (a+b) 1,095 2,260 1,165a) Cuenta Única 385 1,668 1,283

b) Other Accounts of Central Government 710 592 118This positive inflows werereduced by the lower deposits ofIESS-Ecuadorian Social SecurityInstitute and a decrease of bankrequirement due to the change

b) Other Accounts of Central Government 710 592 -1182. Other Institutions of the SPNF 2,624 2,121 -503

IESS 1,538 1,229 -309Petroecuador 320 267 -53Provinces 229 157 -73Municipalities 349 289 -60Other 189 179 -9requirement, due to the change

on the reserve requirement from4% to 2% of total deposits of theFinancial Institutions.


Other 189 179 9

RESERVES OF FINANCIAL SYSTEM 1,224 806 -417Private banks includes BNF 1,110 691 -418Other financial institutions 114 115 1


Up to August, 2009, deposits ofthe private banking and totalcredit showed a contraction of

Deposits and Loans of Private BankingUSD millions

credit showed a contraction of2.2% and 8.1%, respectivelycompared to December 2008.

The current loan portafolioDec-07 Aug-08 Dec-08 Aug 09

(a) (b) (c) (d) Aug.09/ Dec 08

Anuual ChangesAbsolut Relative

(e)= (b)-(a)

(f)= (d)-(c)

Aug.08/ Dec 07

decreased by 9.2% whilenonperforming loans increasedby 36.9%, 22.7 percentage pointshigher than the rate obtained

Deposits 8,840 10,489 10,907 10,670 1,649 -237 18.7% -2.2% Sight Deposits 3,612 4,361 4,660 4,269 749 -392 20.7% -8.4% Time Deposits 5,228 6,128 6,247 6,401 900 154 17.2% 2.5%Total Loans 7,599 8,871 9,654 8,875 1,271 -779 16.7% -8.1%

Dec 08(b) (a) (d) (c) Dec 07

gduring the same period last year.The nonperforming loan ratio was3.6% on August 2009, revealinga deterioration of the portafolio of

Total Loans 7,599 8,871 9,654 8,875 1,271 779 16.7% 8.1%Loan Portfolios 7,383 8,624 9,422 8,558 1,241 -864 16.8% -9.2%nonperforming loans 216 247 232 318 31 86 14.2% 36.9%

nonperforming loan ratio 2.8% 2.8% 2.4% 3.6%

the private banking systemduring this year.

Source: Bank Superintendency and Central Bank of Ecuador

Regarding to evolution of annual growth rates of deposits, they show a declining trend duringg g g p y g g2009, reflecting the contraction of income to the economy. However the nominal level of deposits is

increasing since February 2009.

Private Banks Deposits

30

35

10,000

12,000

15

20

25

6,000

8,000

Annual G

rowthU

SD M

illio

ns

5

10

15

2,000

4,000

h Rate

U

00

Ago-

04N

ov-0

4Fe

b-05

May

-05

Ago-

05N

ov-0

5Fe

b-06

May

-06

Ago-

06N

ov-0

6Fe

b-07

May

-07

Ago-

07N

ov-0

7Fe

b-08

May

-08

Ago-

08N

ov-0

8Fe

b-09

May

-09

Ago-

09

Deposits of the Private Banks Annual Growth Rate


less deposits influenced on lower dynamism of loans reflecting the preference of private…… less deposits influenced on lower dynamism of loans, reflecting the preference of privatebanks for liquidity. On August 2009 the loan portfolio of the banking system presents a negative

annual growth rate of 0.8%.Loan Portfolio of the Banking System

30

35

40

7 0008,0009,000

10,000

A

10

15

20

25

3 0004,0005,0006,0007,000 Annual G

rowth U

SD M

illio

ns

-5

0

5

10

01,0002,0003,000

4 4 5 5 5 6 6 6 7 7 7 8 8 8 9 9

Rate

U

Ago-0

4Di

c-04

Abr-0

5Ag

o-05

Dic-0

5Ab

r-06

Ago-0

6Di

c-06

Abr-0

7Ag

o-07

Dic-0

7Ab

r-08

Ago-0

8Di

c-08

Abr-0

9Ag

o-09

Loans of the Private Banks Annual Growth Rate


Between January-August 2009, the balance of loan portfolio declines in USD 864 millIon(9.2%) compared to december 2008.

On the other hand, up to august 2009, deposits of Other Financial Institutions (*) showed a slight, p g , p ( ) gincrease of USD 81 millIon (4.40%) compared to december 2008

Deposits and Loans of Other Financial InstitutionsUSD MillionsUSD Millions

Dec-07 Aug-08 Dec-08 Aug-09(a) (b) (c) (d)

Annual ChangesAbsolute Relative

(e)= (b) ( )

(f)= (d) ( )

Aug08/ D 07

Aug.09/ D 08

Deposits 1,601 1,872 1,854 1,935 270 81 16.9% 4.4%

Total Loans 2,058 2,357 2,439 2,369 299 -71 14.5% -2.9%Loan Portfolios 1,948 2,232 2,312 2,202 284 -109 14.6% -4.7%n np rf rmin l n 110 125 128 166 15 39 13 5% 30 3%

(b)-(a) (d)-(c) Dec 07 Dec 08

nonperforming loans 110 125 128 166 15 39 13.5% 30.3%nonperforming loan ratio 5.4% 5.3% 5.2% 7.0%


Nevertheless, the total portfolio of OFI, decreased by 2.9% (USD 71 million) compared toDecember 2008.

The nonperforming loans on December 2008-August 2009, presented an increase of about 17 percentage points compared to the same period thus the nonperforming loans ratio rose from 5 2%percentage points compared to the same period, thus the nonperforming loans ratio rose from 5.2%

on December 2008 to 7.0% on August 2009. (*) Include Mutuas, Cooperatives, Private Financial Institutions and Credit Cards.

Credit volume of Private BanksCredit volume of Private Banks

The credit volume decreases in all sectors, mainly in Ene.-Jul.

2008Ene.-Jul.

2009Absolute Relative

USD Millions Annual Changes

consumption and housing. 2008 2009

Commercial 5,279 5,240 -39 -0.7%Consumption 872 655 -216 -24.8%Microcredit 552 469 -83 -15.1%Housing 299 208 -92 -30.6%

Loan porffolios by sector:Private Bank

25%

Total 7,002 6,572 -430 -6.1%


The annual growth of loan portfolio in the commercial

sector consumption housin 5%

10%

15%

20%

25%ow

th R

ate

sector, consumption, housing and microcredit is

negative.

C i l C ti H i Mi dit-15%

-10%

-5%

0%

5%

Ann

ual G

ro

Comercial Consumption Housing Microcredit

Aug 08 - Dec 07 19.2% 9.9% 20.8% 21.5%Aug 09 - Dec 08 -12.7% -4.4% -4.8% -3.3%


From May 28 that the regulation for the domestic liquidity ratio was issued it is observed aFrom May 28, that the regulation for the domestic liquidity ratio was issued, it is observed a significant decline on foreing assests of financial institutions.

Foreing Assets over Deposits

40

42

36

38

40

wth

On May 28th the regulation for the domestic liquidity ratio was issued

32

34

Ann

aul g

row

For everyUSD 100 of deposits are USD 34 13

30

ene

feb

mar ab

r

may jun jul

ago

sep

oct

nov

dic

2007 2008

USD 34,13 abroad.


Foreing Assets of Private BanksForeing Assets of Private Banks(Deposits +Investments)

4,000

4,500

5,000

3.888

3,000

3,500

,

1 500

2,000

2,500Foreing Assets decrease of Financial Institutions by USD 257 million from

August 31st to Septembe

1,000

1,500,

August 31st to Septembe 18th, 2009


According to National Government’s policy of assigning resources to the productive sector theAccording to National Government s policy of assigning resources to the productive sector, thereferential interest rates by type of credit decreased gradually, especially microcredit sector.Nevertheless, during the period January-August 2009, rates tended to stabilize, however, fromJuly the interest rate for consumption sector showed an increase.

Lending rates by type of LoanAnnual Growth

35.00

40.00

45.00

50.00

es

Sector Sep-07 Sep-09 Variation

15.00

20.00

25.00

30.00

Annu

al c

hang

e Productive 10.8 9.2 -1.7Consumption 17.8 18.0 0.1Housing 11.5 11.2 -0.3Microcredit 40.7 30.8 -9.9

0.00

5.00

10.00

Fuente: BCE

Productive Consumption Housing Microcredit

Documents

Ecuador: macroeconomicEcuador: macroeconomic overview · Chile Ecuador Brasil Colombia Argentina Perú Paraguay ... Imports -17,600.7 -3,535.2 -3,428.1 -3.0% Consumption -4,037.4