Ecuador : Request for Purchase under the Rapid Financing Instrument and Cancellation of Arrangement under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for Ecuador
Author/Editor:
International Monetary Fund. Western Hemisphere Dept.
Publication Date:
May 28, 2020
Electronic Access:
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Summary:
Ecuador is facing urgent and immediate balance of payment (BOP) needs driven by the sharp propagation of the Covid-19 outbreak— Ecuador is one of the hardest hit countries in Latin America—a plummeting of oil prices, and a dramatic collapse of global demand. This confluence of shocks is expected to significantly reduce Ecuador’s export revenues, put considerable strain on the budget, curtail external financing flows, dampen economic activity, which is expected to contract by 6.7 percent in 2020, and create substantial risks to debt sustainability. The resulting external financing gap is about 8.4 percent of GDP in 2020 and 7.6 percent of GDP in 2021. If not addressed promptly, the immediate BOP need could cause significant socio-economic disruptions.
