The IMF Country Reports Series covers economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with officials of the country, is published at the option of the member.
International Monetary Fund. Western Hemisphere Dept.
INTERNATIONAL MONETARY FUND
Declining oil prices, U.S. dollar appreciation, and limited access to international financing have worsened the fiscal, economic, and financial outlook. The situation has been exacerbated by the fact that Ecuador had not build up financial reserves during the period of high oil prices and is therefore now facing a large unresolved financing gap. Then, on April 16, Ecuador was hit by a 7.8magnitude earthquake which created new fiscal and balance of payments needs. The authorities' policy response to the imbalances has been timely but still insufficient given the size of the shocks, the urgent nature of the vulnerabilities, and reduced foreign currency reserves. Real GDP is expected to contract significantly this year and next.