1. NS4540 Winter Term 2019 Ecuador and the IMF, 2019
Europa brazil economy

2. Overview In February 2019 Ecuador signed a $4.2bn program with the IMF
Represents final break by President Lenin Moreno with policies of his predecessor Rafael Correa
Loan forms part of larger $10bn package with other multilateral lenders to support country’s struggling economy
Presently country burdened by external debt that grew under Correa, in part to oil-backed loans from China
Moreno who came to power in 2017 trying to
Curb public spending and
Support country’s external accounts with bond issues
Problem – long record of past defaults makes borrowing very expensive

3. Current Crisis Over past two years Moreno sought to
Reform economy and
Distance him from more controversial political positions of Correa
Correa now faces corruption charges and lives in Belgium
Ecuador fell into recession in 2016 with the decline in oil prices
Because economy fully dollarized, unable to devalue to improve competitiveness
Country stills owes China about $4bn in loans for oil

4. EIU Forecast

5. Risk Analysis