16 Jan, 2020

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Ecuador

Ecuador was the 59th largest economy in the world by nominal GDP in 2018. Its GDP per capita was $6,345 USD. It was the largest exporter of bananas by value in 2018. Personal remittances were 2.8 percent of GDP in 2018. It was ranked 66th in the World Bank's Human Capital Index and 102nd in the Economic Complexity Index in 2017. It is a member of the regional trading group Mercosur. Services was the largest economic sector in 2018 (51.6 percent of GDP), followed by manufacturing (14.6 percent), and agriculture (9.24 percent). In 2017, the largest export sectors were agriculture (49.5 percent), minerals (34.45 percent), and services (9.52 percent). The largest individual exports were crude oil (30.4 percent), bananas and plantains (16.15 percent), frozen shrimps (12.35 percent), and travel and tourism (6.84 percent). Its largest export partners were the USA (28.8 percent), Vietnam (6.64 percent), Peru (6.62 percent), Chile, (6.04 percent), and Russia (5.67 percent). The largest goods imports were refined petroleum (13.94 percent), cars (4.15 percent), and aromatic hydrocarbon mixes (4.1 percent). Ecuador gained independence from the Spanish in 1820 and then separated from Gran Colombia in 1830. Between 1860s and 1920s, cocoa was the main export. This was replaced by bananas in the 1940s, and oil in the 1970s. In the 1960s, the country switched from an open trade policy towards import substitution resulting in increased diversification. The economy grew strongly in the 1970s because of an increase in oil prices. The increase in revenue was accompanied by a large increase in public spending. By the late 1980s, public debt and inflation had risen leading to a debt crisis in 1993. The economy stabilised after dollarization in 2000 because it stopped the government from financing spending through seigniorage. Between 2001 and 2012, the oil price increased ten-fold propelling growth. From 2006, personal remittances became the largest source of national income after oil revenue. With the oil price declining in 2014, the economy fell into recession in 2015 and remained in recession in 2016. The government responded with reduced spending and new reforms. Growth has recovered slowly.