How much could Ecuador's economy shrink in 2020?
According to a report from April 18, 68.2% of COVID-19 cases are in Guayas.
Time passes, and it seems that the COVID-19 crisis is reaching its peak. The world is beginning to take action, and new strategies will be proposed in the weeks ahead.
Economists have not had the opportunity to analyze the economic impact in detail, describing this pandemic as the worst situation since World War II, and even since the Great Depression of the 1930s.
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What's happening in Ecuador?
Undoubtedly, the country has been paralyzed for a month, drastically impacting businesses that are scrambling daily to find strategies to avoid being devoured by this crisis. While the Central Bank of Ecuador (BCE) and multilateral organizations have not published estimates of the economic impact, as they are official entities and it would be premature to assess it, which would undoubtedly be a significant blow to those still weathering the waves of setbacks day after day, Vice President Otto Sonnenholzner mentioned a preliminary figure of $2 billion in losses a few days ago, a figure that is around 2% of GDP.
Goldman Sachs, a US firm, indicated that the Ecuadorian economy will contract by 5.7%, a figure that surpasses the 4.7% decline during the 1999 Banking Holiday. According to the IMF, in its report published on April 14, Ecuador will be the most affected economy after Venezuela. The multilateral organization estimates that Ecuador's GDP will decrease by 6.3% in 2020.
At the end of the previous year , growth was estimated at 2% (IMF) , and this figure undoubtedly changed drastically in the first few months.
There are two factors at play in this crisis: the drop in oil prices and the volatility in financial markets, which makes it difficult and limits the country's access to credit. It's a fact that around 70% of the country's economic activity is at a standstill; many businesses are progressing slowly with remote work, and many others will be unable to adapt due to their nature until the situation begins to improve.
