Ecuador: macroeconomicEcuador: macroeconomic overview
October, 2009
Real SectorReal Sector
- GDP-Inflation-Unemployment
On January 2000, Ecuador adopted a dollarized monetary regime. Economic activity registered sustained average annual real growth rate of 4.8% during the
2000-2008 period. During 2008, GDP grew 6.5% on annual terms.
Gross Domestic ProductGross Domestic ProductAnnual growth rate %During the 2000-2008
growth was related to:i) 10.8% average 8 0) g
annual growth rate on Gross fixed capital
formation (GFKF), in part due to public 2 7
5.2 4.7
2 4
4.1
2.8
5.34.2
3.6
8.0
6.0
3.9
2 5
6.5
4.5
6.5
8.5
part due to public investment.
ii) 5.6% average annual growth rate on
2.71.5
0.3
1.72.4 2.1 2.5
‐1.5
0.5
2.5
annual growth rate on Private consumption.
iii) 5.1% average annual growth rate on ‐6.3‐7.5
‐5.5
‐3.5 Period average annual growth rate 2.7%
Period average annual growth rate 4.8%
Exports
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Source: Central Bank of Ecuador
During the 2000-2008 period, oil GDP registered average annual real growth rate ofDuring the 2000 2008 period, oil GDP registered average annual real growth rate of 2.1%. The increase on 2004 oil production is related to private production increases
result of the construction of the OCP pipeline. From 2005, oil GDP falls due to insufficient public and private investment.
Oil and Non-Oil Value Added *Annual growth rate
35.0
33 5
38.5
23.5
28.5
33.5 OIL VALUE ADDEDNON OIL VALUE ADDEDGDP
6.7
3 15.5
3.9 3.5 3.85.8 6.3
4.0
7.95.3 4.2 3.6
8.06.0
3.92 5
6.58.5
13.5
18.5
0.9 1.1
‐4.4
‐0.2
‐5.0 ‐5.17
3.1 3.52.8
3.6 2.5
‐6.5
‐1.5
3.5
Source: Central Bank of Ecuador
‐10.05‐11.5
2000 2001 2002 2003 2004 2005 2006 2007 2008
As a result of the world crisis, during the Second Quarter 2009 GDP registered aAs a result of the world crisis, during the Second Quarter 2009 GDP registered areduction of 1.06% over the same period of the previous year. Oil Value Addedshows a decrease of 10.22% on annual terms (q/q-4) due to a significant reductionon the production of private companies.
Oil and Non Oil Value Added*Quarterly change annualized rate t/t-4.
9 87
14.50
0.59
2.78
5.25 5.40 5.443.89 3.85
2.34
3.33
6.387.56
9.879.05
5.41
2.91
0 31
4.834.08
4.89
1.81 1.631 14
1.38
5.806.53
8.28 8.01
3.39 1.514.50
9.50
0.59
‐4.52
‐1.29‐0.64
‐3.19
‐7 02
0.311.14
‐1.06
‐5.50
‐0.50
‐14.21
‐9.13
‐10.99
‐7.02
‐12.82
‐10.91‐10.22
‐15.50
‐10.50
OIL VALUE ADDED
NON OIL VALUE ADDED
Source: Central Bank of Ecuador
‐18.34‐20.50
2006.I 2006.II 2006.III 2006.IV 2007.I 2007.II 2007.III 2007.IV 2008.I 2008.II 2008.III 2008.IV 2009.I 2009.II
GDP
On the other hand Non-oil Value Added shows an annual growth of 0.31% (q/q-4)On the other hand Non oil Value Added shows an annual growth of 0.31% (q/q 4)due to better results on the construction industry and the public administration.Industries such as trade, agriculture and oil refining registered decreases of 4.13%,3.04% and 7.17% respectively.
-2.31
-1.06
Other elements GDP
GDP
Gross Value Added by IndustryConstant prices t/t-4
2009-II
1.87
-6.24
6.68
2.09
-0.88
2.31
Other services
Services of financial intermediation
Public Administration
household
Total Added Value Gross
Other elements GDP
-1 11
5.95
-4.13
3.52
1.59
1.87
Electricity and water
Construction
Trade
Transport and storage
Financial intermediation
Other services
-3 04-0.10
-2.20
-1.08
-7.171.11
Agriculture ranching hunt and forestry
Fishing
Explotation of mines
Manufacturing industry (exclude oil)
Oil refining
Electricity and water
Source: Central Bank of Ecuador
3.04
-9.50 -4.50 0.50 5.50 10.50
Agriculture, ranching, hunt and forestry
It is interesting to note that compared to other economies of the region, economicg p gactivity in Ecuador managed to grow during the last quarter of 2008 and firstquarter 2009.
Growth rates of GDP (t/t‐4)
6 00%
8.00%6.42%
Growth rates of GDP (t/t 4)2009.I ‐ 2009.II
2.00%
4.00%
6.00%
0.20%
3.39%
1.30%
4.05% 3.90%
1.51%2.04%
1.77%
‐4.00%
‐2.00%
0.00%
‐1.10%
‐2.30%‐1.80%
‐0.40%
‐4.10%4 50%
‐1.06%‐1.20%
‐0.50% ‐0.80% ‐1.09%
‐4.30%
‐6.00%Chile Ecuador Brasil Colombia Argentina Perú Paraguay
2008.IV 0.20% 3.39% 1.30% ‐1.10% 4.05% 6.42% 3.90%
2009.I ‐2.30% 1.51% ‐1.80% ‐0.40% 2.04% 1.77% ‐4.10%
2009.II ‐4.50% ‐1.06% ‐1.20% ‐0.50% ‐0.80% ‐1.09% ‐4.30%
‐4.50% 4.30%
Sources : Central Banks of respective countries.
On August of the present year, CPI registered a monthly decrease of -0.3% for the g p y , g yfourth consecutive month, due in part to lower prices on agricultural products as a
result of favorable market supply. Annual inflation shows a deceleration, reaching only 3.3% on august, lower than the 10.8% registered on august 2008.
A l M hl d C l i I fl iAnnual, Monthly and Cumulative Inflation
10.02%
9.50%10.00%10.50%11.00%
7.94%
6 00%6.50%7.00%7.50%8.00%8.50%9.00%9.50%
Monthly Inflation
Cumulative Inflation
Annual Inflation
%3.33%3.00%
3.50%4.00%4.50%5.00%5.50%6.00% Annual Inflation
0.21%
0 30%
2.48%
‐0 50%0.00%0.50%1.00%1.50%2.00%2.50%
Sources : INEC y BCE
‐0.30%0.50%
jan‐07
Feb‐07
Mar‐07
apr‐0
7May‐07
Jun‐07
Jul‐0
7au
g‐07
Sep‐07
Oct‐0
7No
v‐07
dec‐07
jan‐08
Feb‐08
Mar‐08
apr‐0
8May‐08
Jun‐08
Jul‐0
8au
g‐08
Sep‐08
Oct‐0
8No
v‐08
dec‐08
jan‐08
Feb‐09
Mar‐09
apr‐0
8May‐09
Jun‐09
Jul‐0
9au
g‐09
Tradable goods show a monthly decrease on its CPI of -0.41% (lower prices of g y ( pagricultural and industrial products), while non-tradable goods show a monthly
decrease on its CPI of -0.15%.
Inflation of Tradable and Non Tradable GoodsInflation of Tradable and Non-Tradable Goods
1.9%2.1%2.3%2.5%
Monthly
Tradable
0 34%0.9%1.1%1.3%1.5%1.7%
Tradable
Non Tradable
0.2%
0.34%
0.04% ‐0.15%‐0.1%0.1%0.3%0.5%0.7%
‐0.30%
‐0.41%‐0.7%‐0.5%‐0.3%
n‐07
b‐07
r‐07
r‐07
y‐07
n‐07
ul‐07
g‐07
p‐07
t‐07
v‐07
c‐07
n‐08
b‐08
r‐08
r‐08
y‐08
n‐08
ul‐08
g‐08
p‐08
t‐08
v‐08
c‐08
n‐09
b‐09
r‐09
r‐09
y‐09
n‐09
ul‐09
g‐09
Sources : INEC y BCE
jan
Feb
Ma ap Ma y Jun
Ju aug
Sep
Oc
No v dec
jan
Feb
Ma ap Ma y Jun
Ju aug
Sep
Oc
No v dec
jan
Feb
Ma ap Ma y Jun
Ju aug
D it f th ld i d fi i l i i l t t d i thDespite of the world economic and financial crisis, unemployment rate during thesecond quarter of 2009 was still on the one digit range
L i A i l II Q 2009 Ad d E i II Q 2009
7.85Venezuela 8.37OECD
Latin America unemployment – II Quarter 2009 Advanced Economies– II Quarter 2009
8.3
5.17
7.98
Ecuador
México
Uruguay
5.19
3.9
8.9
Japan
Korea
UE 27
8 62
10.7
11.72
B il
Chile
Colombia
9.36
8.42
5.19
United States
Canada
p
Sources : Central Banks, Statistics Institutes, Eurostat, OECD, OIT
8.62
0 2 4 6 8 10 12 14
Brasil 18.7
0 5 10 15 20
Spain
External SectorExternal Sector
- Balance of Payments-Current Account-Trade Overview
Balance of Payments (USD Millions)
External sector has beenaffected the most by the world
2008 2008.I 2009.I % of change1 CURRENT ACCOUNT BALANCE 1,174.7 1,288.7 -817.0
Goods 1,371.3 1,207.5 -734.8
Trade account (registred trade) 909.9 1,087.5 -805.5Exports 18,510.6 4,622.7 2,622.5 -43.3%affected the most by the world
crisis, registering a currentaccount deficit of USD 817
million during the first quarter of th hil d i th
Crude oil and derivatives 11,672.8 2,964.2 1,011.9 -65.9%others 6,837.8 1,658.5 1,610.7 -2.9%
Imports -17,600.7 -3,535.2 -3,428.1 -3.0%Consumption -4,037.4 -823.7 -772.6 -6.2%others -13,563.3 -2,711.5 -2,655.5 -2.1%
Non Registered Trade and Others 461.5 120.0 70.7 -41.1%Non factor services -1,587.1 -340.6 -323.2 -5.1%
the year while during the sameperiod of 2008 Ecuador
registered a USD 1289 millionsurplus.
Credits 1,369.6 319.9 323.1 1.0%Debits -2,956.7 -660.5 -646.3 -2.1%
Factor Services -1,598.2 -395.5 -310.9 -21.4%Credits 187.0 64.1 13.0 -79.8%Debits -1,785.2 -459.6 -323.9 -29.5%
Transfers 2,988.6 817.3 551.9 -32.5%o/w remittances 2 821 6 759 6 554 5 -27 0%p
Most affected areas wereexports (43.3% annual
decrease) basically oil exports
o/w remittances 2,821.6 759.6 554.5 27.0%
2 CAPITAL AND FINANCIAL ACCOUNT -339.5 -628.1 -571.0 -9.1%Capital Account 32.9 4.8 4.9 2.5%Financial Account -372.4 -632.9 -575.8 -9.0%
Foreing Direct Investment 993.2 426.1 116.1 -72.7%Inversión de cartera (neto) 213.1 102.2 -188.1 -70%Other Investment (1) -1,578.8 -1,161.2 -503.9
decrease) – basically oil exportswith 65.9% annual decrease and remittances with a 27% annual
decrease.
3 ERRORS AND OMISSIONS 112.9 15.5 53.7GLOBAL BALANCE OF PAYMENTS (1+2+3) 948.1 676.1 -1,334.2
FINANCING -948.1 -676.1 1,334.2 Net Foreing Assets in Central Bank (2) -952.2 -622.7 1,229.0Exceptional Financing (3) 4.1 -53.4 105.2
Notes:1/ It refers to the movement of public and private debt2/ It referes to the change in Free Disponsable Reserve (-) means increase3/ Include debt forgiveness, arrears y arrears payments
Current account evolution starts to deteriorate on the last quarter of 2008. TradeCurrent account evolution starts to deteriorate on the last quarter of 2008. Tradebalance went from registering surpluses during the first semester of 2008 to sharp
deficit on the last quarter of 2008 and the first quarter 2009. Nevertheless, during thesecond quarter of the present year, both current account and trade balance show a
li htCurrent Accpunt and its Components
Millions of USD
slight recovery.
654 711 762 801676
771 815 826 760 712 707 644555 609.7
1,289 1,343
400
900
1400
-799 -823 -803 -829 834 -825 864-736
-821 836 -792-634
-600
-100
400
799 -823 803 -829 -834 -825 -864 -895-821 -836
-1600
-1100
2006
.I
2006
.II
2006
.III
2006
.IV
2007
.I
2007
.II
2007
.III
2007
.IV
2008
.I
2008
.II
2008
.III
2008
.IV
2009
.I
2009
.II
Source : Central Bank of Ecuador
Factor and Non Factor Services RemittancesCurrent Account Trade Balance (registered trade)
The world crisis on developed countries that have a significant percent of ecuadorianp g pworkers, such as Spain and United States, severly affected remittances since thesecond semester of 2008. On march 2009, remittances reached only USD 555
million, the lowest ammount registered during the last three years (equivalent to anannual decrease of 27%) However it is important to note that during the secondannual decrease of 27%). However, it is important to note that during the second
quarter of 2009, remittances show a slight recovery when reaching USD 610 million. Recieved Remittances
USD millionsUSD millions
801
771
815 826
800
900
1,000
654
711
762
676
771 760
712 707
644
555
609.7600
700
800
400
500
300
2006
.I
2006
.II
2006
.III
2006
.IV
2007
.I
2007
.II
2007
.III
2007
.IV
2008
.I
2008
.II
2008
.III
2008
.IV
2009
.I
2009
.II
Source : Central Bank of Ecuador
Foreign Direct Investment reached USD 116 million during the first quarter ofForeign Direct Investment reached USD 116 million during the first quarter of 2009, registering a decrease of USD 310 million compared to the previous year,
mostly as a result of lower investment in the oil sector.
Foreign Direct InvestmentUSD millions
256.4 260
160
210
2.3
37.3
5.7 23.3
53.7 47.9
1 7
72.0
36.7
8.8 10.6 15.2 20.9
10
60
110
Agriculture, ranching, hunt and forestry
Explotation of mines
Manufacturing industry
(exclude oil)
Electricity and water Construction Trade
Services provided to businesses
2008 I 1/ 2 3 256 4 37 3 5 7 23 3 53 7 47 9
2.3 1.7
-40
10
Source : Central Bank of Ecuador
2008-I 1/ 2.3 256.4 37.3 5.7 23.3 53.7 47.9 2009-I 1/ 1.7 72.0 36.7 8.8 10.6 15.2 20.9
Unlike previous years, as of July 2009, total trade balance registered a deficit ofUSD 681 million, associated mainly to a lower surplus on the oil trade balance due tolower oil prices (55.9% annual decrease) as well as lower exports volume (8%annual decrease)
Deficit on non oil trade
Trade BalanceUSD Millions
12000Total Oil Non Oil Deficit on non-oil trade
balance is lower in USD 775 million to the deficitregistered during 2008
5321449
1414910 1154
25404155
51645750
8455
3186 2892
6204
22082000
4000
6000
8000
10000Total Oil Non Oil
g gas a result of a contraction on
consumption and rawmaterials imports
532 910 1154 677
‐681
‐3623‐3715
‐4336
‐2032 ‐2215
‐3663‐2889
‐6000
‐4000
‐2000
0
2000
materials imports. ‐7545
‐10000
‐8000
2005
2006
2007
2008
Jan‐Jul 06
Jan‐Jul 07
Jan‐Jul 08
Jan‐Jul 09
Source : Central Bank of Ecuador
Despite of the crisis, total trade balance finally shows some signs of recoveryDespite of the crisis, total trade balance finally shows some signs of recoveryduring the last months, mainly as a result of lower oil and non-oil imports as well as
higher oil export prices
Monthly Trade BalanceMonthly Trade BalanceJan 2008 – Jul 2009
USD Millions
1 300
Total Oil Non Oil
582708
292
846858
646
882
1,189
901881
773627
425307
157 151243
340 383516
417300
800
1,300
298208
277 175
87
‐219
536
‐408‐555‐414
‐238 ‐153
5‐16
11421
120157 151 340
‐547
‐276
‐438
482‐390 ‐396
‐335‐398
‐402‐396
‐200
300
‐536‐605
‐482‐609
‐705 ‐686
‐845‐961
‐715 ‐675‐571
‐1,200
‐700
Jan‐08
Feb‐08
Mar‐08
Apr‐08
May‐08
Jun‐08
Jul‐0
8
Aug‐08
Sep‐08
Oct‐08
Nov‐08
Dec‐08
Jan 09
Feb 09
Mar 09
Apr 0
9
May 0
9
Jun 09
Jul 0
9
Source : Central Bank of Ecuador
M M A N M M
During the first seven months of 2009, oil exports reached USD 3330 million, compared toUSD 7958 million during the same period of 2008, equivalent to a 58.2% decrease. However,during the last months levels have started to recover.
Oil ExportsJanuary - July
Growth rates2007 2008 2009 Jan-Jul 08 Jan-Jul 09
OIL EXPORTS
Value (USD millions) 4,213 7,958 3,330 88.9% -58.2%Volume (millions of barrels) 81.2 84.2 77.6 3.7% -7.8%Unit value (USD/barrel) 51 9 94 5 42 9 82 1% 54 6%Unit value (USD/barrel) 51.9 94.5 42.9 82.1% -54.6%A. Oil Crude
Value (USD millions) 3,778 7,298 2,959 93.2% -59.5%Volume (millions of barrels) 72.4 75.9 69.8 4.8% -8.0%Unit value (USD/barrel) 52.2 96.1 42.4 84.3% -55.9%
B Derivados de PetróleoB. Derivados de PetróleoValue (USD millions) 435 660 371 51.5% -43.7%Volume (millions of barrels) 8.8 8.3 7.8 -5.3% -6.2%Unit value (USD/barrel) 49.6 79.4 47.6 60.0% -40.0%
Source : Central Bank of Ecuador
Eventhough non-oil exports continue to fall due to less dynamic behavior of non traditionalEventhough non-oil exports continue to fall due to less dynamic behavior of non traditionalexports (5.4% reduction on annual terms during the first seven months), during the lastmonths of the year traditional exports show some signs of recovery.
Non-Oil ExportsUSD millions
6,8387,000
8,000
Non Traditional Exports
3,946
5,184
5,993
5,000
6,000
Non Traditional Exports
Traditional Exports
Non Oil Exports
1,879 1,845
2,305
2,984
3,546
2,275 1,9332,778
2,981
3,616 3,519
4,230
2,900
3,380
3,9903,776
3,000
4,000
1,364 1,4811,737 1,674
1,9252,200
2,4472,892
1,273 1,4041,715 1,844
1,4151,500
1,627
1,976
1,000
2,000
Source : Central Bank of Ecuador
02001 2002 2003 2004 2005 2006 2007 2008 (p) Jan-Jul 06 Jan-Jul 07 Jan-Jul 08 Jan-Jul 09
During the period January-July, total imports reached USD 7771 million, of which non-oil importsare USD 5710 million, 12.9% less than the same period of 2008. During the period, there is a sharp generalized reduction on imports : i) non durable consumption (-16.4%) ; ii) durable consumption (-17.8%); raw materials (-16.9%); and capital goods (-2.9%)
Total ImportsFOB USD millions
9,000
10,000
2,045
Consumption Raw Material Oil Derivatives Capital Goods
5,000
6,000
7,000
8,000
2,276
3,1952,655
1,507
,
1,698
40.3%
35.7%
-16.9%
-16.9%
0
1,000
2,000
3,000
4,000
1,804 2,345 2,276
1,3211,754 1,122
30.0%
-36.0%
-2.9%
32.8%
0Jan-Jul 2007 Jan-Jul 2008 Jan-Jul 2009
Source : Central Bank of Ecuador
FISCAL SECTOR- Non Financial Public Sector
|(NFPS)- Central Government (CG)- Financing of the Central G tGovernment
During the first semester of 2009 and as a result of the drop on international oil prices,During the first semester of 2009 and as a result of the drop on international oil prices, the Non Financial Public Sector (NFPS) revenues fell by 21.3% and expenditures grewby 6.8% on annual terms. Global result is a deficit of 2.4% of GDP, compared to global
surplus of 2.8% of GDP registered during the same period of 2008.
Operations of the NFPSJanuary – June (prov.)
10169
92311000011000
86428006
9231
6000700080009000
10000
nes
15272000300040005000
USD
mill
on
-1225-2000-1000
01000
Total revenues Total expenditures Global Surplus or
Source: Ministry of Finance and NFPS Institutions
Total revenues Total expenditures Global Surplus or Deficit
2008 2009
Revenues of the NFPS
Revenues during the firstsemester of 2009 have been
January-June (prov)
2008 2009 Absolute Relative
Total revenues 10169 8006 -2163 -21.3
USD millions Variation
semester of 2009 have beenmainly affected by:
i) Fall of 59.9% on oilrevenues
Oil revenues 4654 1868 -2786 -59.9Non Oil revenues 5307 5703 396 7.5Taxes revenues 3276 3759 483 14.7Contributions to the Social Security 888 820 -67 -7.6revenues
ii) Fall of 7.6% of Social Security Contributions
iii) Increase of 14.7% of taxSource: Ministry of Finance and NFPS Institutions
Others 1143 1124 -19 -1.6
Operat. surplus Non Finacial PublicEnterprises
208 435 226 108.5
revenuesiv) Increase on 108.5% on
Operational Surplus of the Public Companies
Taxes revenues; 47%
Contributions to the Social Security; 10%
Others; 14%
y
p
47% of the NFPS revenues come fromTax Revenues and 23% from Oil
Operat. surplus Non Finacial
Public Enterprises;
5%Tax Revenues and 23% from OilRevenues.
Oilrevenues; 23%
5%
Expenditures of the NFPS *J J ( )January-June (prov)
Expenditures during the first2008 2009 Absolute Relative
Total expenditures 8642 9231 588 6.8
USD millions Variation
semester of 2009 have beenmainly affected by:
i) Increase of 5.8% on total t dit
Current expenditure 6098 6454 356 5.8Interest 391 184 -207 -53.0Wages and salaries 2074 2595 521 25.1Purchase of goods and services 814 931 118 14.5Benefits of Social Security 556 758 202 36.4Other 2265 1986 278 12 3current expenditures
ii) Increase of 9.1% oncapital expenditures
iii) Fall of 53% on interest
Other 2265 1986 -278 -12.3
Capital expenditure and net loan 2544 2777 233 9.1
#¡DIV/0!Global Surplus or Deficit 1527 -1225 -2752 -180.2
iii) Fall of 53% on interestpayments due to lowerdebt levels (global bonds)
Other; 22%Capital
expenditure ; 30%
Source: Ministry of Finance and NFPS Institutions
70% of the NFPS expenditures are current expenditures while 30% are capital and investment expenditures Interest; 2%
Purchase of goods and
Benefits of Social
Security; 8%
(*) Expenditures are on a accrual basis.
p p
Wages and salaries; 28%
services; 10%
The deficit of the NFSP during the first semester 2009 is financed basically by a reduction ond it f th fi i l t d i l t d b di b t
Financing of the NFSP USD millions
deposits of the nonfinancial sector and in a less extend by new disbursements.
J j2008 2009 (prov)
Overall Balance 1,527 -1,225
a. Surplus (-) or Deficit (+) (d+e) * -1,527 1,225
January‐june
b. Amortization 687.3 929.4 Domestic 10 0 External 678 929
c. Disbursements 136 165Domestic 5 0 Domestic 5 0
Foreign 130 165 Projects financing 130 165 Multilaterals 0 0
d. Total financing ( c-b) -552 -764
O h fi i ( 1 2 3 4) 975 1 989e. Other financing sources ( 1+2+3+4) -975 1,989 1. Deposits variation of NFPS in Central Bank -2,776 1,236 2. Deposits variation of NPFS in Finacial Institutions. -69 68 3. Assets variation: FEIREP CEREPS y FAC 1,183 119 4. Arrears variation 687 566
o/w Domestic 756 431 o/w Domestic 756 431 External -69.3 135
*/ negative sign means surplus
Source: Ministry of Finance and NFPS Institutions
During the first semester of 2009 the Central Government revenues the NFPS mostDuring the first semester of 2009 the Central Government revenues, the NFPS mostsignificant governemnt level, reached 9.7% of GDP, while the expenditures 11.9% of
GDP. As a result, the Central Government registered a deficit of 2.3% of GDP in contrast with the 1.1% of GDP surplus registered during the same period of 2008.
Operations of the NFPS and the Central GovernmentJanuary-June 2009
8,006
9,231
9,000
10,000
8,006
4,982
6,139
5,000
6,000
7,000
8,000
illio
n
1,000
2,000
3,000
4,000
USD
m
-1,225-1,157
-2,000
-1,000
0
Revenues Expenditures Global Surplus
Source: Ministry of Finance
NFPS CG
Central Government RevenuesJanuary–June (prov.)
The decrease on the Central 2008 2009 Absolute Relative
Total revenues 6 473 4 982 -1 492 -23 0
USD millions Variation
Government revenues during this first six months of 2009 (23% annual terms) is a result of the significant drop
Total revenues 6,473 4,982 -1,492 -23.0
Petroleum revenues 2,569 724 -1,846 -71.8
Nonoil income 3,475 3,996 521 15.0
Taxes revenues 3,161 3,646 485 15.4result of the significant drop in oil prices and oil revenues.
On the other hand, despite de world crisis tax revenues
Source: Ministry of Finance
Nontax 315 350 35 11.2
Transfers 429 262 -166 -38.8
de world crisis, tax revenues grew by 15,4% as a result of i) important economic activity during the previous year ii) 2008 Tax Reform iii) Increased efficiency in tax collection.
It si important to note that legal changes made on 2008 eliminated oil funds and since april 2008
all oil revenues go directly into the Central Govermemnt BudgetGovermemnt Budget.
Total expenditures increased by 4 9% due to an increase of 9 4% on currentTotal expenditures increased by 4.9% due to an increase of 9.4% on currentexpenditures. Capital expenditures, that by law must be financed by oil revenues,
decreased in 2.9%. As a result there is a deficit of USD 1157 million in contrast withthe USD 620 million surplus of the previous period.
Central Government ExpendituresJanuary – June (prov.)
2008 2009 Absolute Relative
Total expenditures 5,853 6,139 286 4.9
USD million Variation
Currents 3,712 4,059 347 9.4
Wages and salaries 1,664 2,135 471 28.3Current transfers 870 824 -46 -5.3Good and services 248 363 115 46.4Other current expenditures 505 497 -8 -1.6Interests 425 240 -185 -43.5
Capital 2,142 2,080 -61 -2.9
Global Deficit (-) or Surplus (+) CG 620 -1,157 -1,777 -286.7
Source: Ministry of Finance
G oba e c t ( ) o Su p us ( ) CG 6 0 , 57 ,777 86.7
MONETARY AND FINANCIAL SECTOR
M i B l A f h- Main Balance Accounts of the Central Bank of Ecuador
- Deposits and LoansNonperforming loan ratio- Nonperforming loan ratio
- Lending rates.
Main Balance Accounts of the Central Bank
Between December 2008 andSeptember 30 2009, the NetForeing Assets of Central Bank
Main Balance Accounts of the Central BankUSD millions
gincreased by USD 152 milliondue mainly to: i) Disbursementsof FLAR (Latin American ReserveFund) of USD 480
AbsoluteAnnual Change
31-Dec-2008 30-Sep-09 30 Sep.09/31 Dec.08(a) (b) (c)=(b)-(a)
BALANCE
)million, Petrochina of USD 1000millIon ii) Allocation of SDR’sequivalent to USD 352 million.
This positive inflows were
Net Foreing Assets of Central Bank 4,473 4,625 152
DEPOSITS OF THE SPNF (1+2) 3,720 4,381 662
1. Central government (a+b) 1,095 2,260 1,165a) Cuenta Única 385 1,668 1,283
b) Other Accounts of Central Government 710 592 118This positive inflows werereduced by the lower deposits ofIESS-Ecuadorian Social SecurityInstitute and a decrease of bankrequirement due to the change
b) Other Accounts of Central Government 710 592 -1182. Other Institutions of the SPNF 2,624 2,121 -503
IESS 1,538 1,229 -309Petroecuador 320 267 -53Provinces 229 157 -73Municipalities 349 289 -60Other 189 179 -9requirement, due to the change
on the reserve requirement from4% to 2% of total deposits of theFinancial Institutions.
Source: Central Bank of Ecuador
Other 189 179 9
RESERVES OF FINANCIAL SYSTEM 1,224 806 -417Private banks includes BNF 1,110 691 -418Other financial institutions 114 115 1
Source: Central Bank of Ecuador
Up to August, 2009, deposits ofthe private banking and totalcredit showed a contraction of
Deposits and Loans of Private BankingUSD millions
credit showed a contraction of2.2% and 8.1%, respectivelycompared to December 2008.
The current loan portafolioDec-07 Aug-08 Dec-08 Aug 09
(a) (b) (c) (d) Aug.09/ Dec 08
Anuual ChangesAbsolut Relative
(e)= (b)-(a)
(f)= (d)-(c)
Aug.08/ Dec 07
decreased by 9.2% whilenonperforming loans increasedby 36.9%, 22.7 percentage pointshigher than the rate obtained
Deposits 8,840 10,489 10,907 10,670 1,649 -237 18.7% -2.2% Sight Deposits 3,612 4,361 4,660 4,269 749 -392 20.7% -8.4% Time Deposits 5,228 6,128 6,247 6,401 900 154 17.2% 2.5%Total Loans 7,599 8,871 9,654 8,875 1,271 -779 16.7% -8.1%
Dec 08(b) (a) (d) (c) Dec 07
gduring the same period last year.The nonperforming loan ratio was3.6% on August 2009, revealinga deterioration of the portafolio of
Total Loans 7,599 8,871 9,654 8,875 1,271 779 16.7% 8.1%Loan Portfolios 7,383 8,624 9,422 8,558 1,241 -864 16.8% -9.2%nonperforming loans 216 247 232 318 31 86 14.2% 36.9%
nonperforming loan ratio 2.8% 2.8% 2.4% 3.6%
the private banking systemduring this year.
Source: Bank Superintendency and Central Bank of Ecuador
Regarding to evolution of annual growth rates of deposits, they show a declining trend duringg g g p y g g2009, reflecting the contraction of income to the economy. However the nominal level of deposits is
increasing since February 2009.
Private Banks Deposits
30
35
10,000
12,000
15
20
25
6,000
8,000
Annual G
rowthU
SD M
illio
ns
5
10
15
2,000
4,000
h Rate
U
00
Ago-
04N
ov-0
4Fe
b-05
May
-05
Ago-
05N
ov-0
5Fe
b-06
May
-06
Ago-
06N
ov-0
6Fe
b-07
May
-07
Ago-
07N
ov-0
7Fe
b-08
May
-08
Ago-
08N
ov-0
8Fe
b-09
May
-09
Ago-
09
Deposits of the Private Banks Annual Growth Rate
Source: Bank Superintendency and Central Bank of Ecuador
less deposits influenced on lower dynamism of loans reflecting the preference of private…… less deposits influenced on lower dynamism of loans, reflecting the preference of privatebanks for liquidity. On August 2009 the loan portfolio of the banking system presents a negative
annual growth rate of 0.8%.Loan Portfolio of the Banking System
30
35
40
7 0008,0009,000
10,000
A
10
15
20
25
3 0004,0005,0006,0007,000 Annual G
rowth U
SD M
illio
ns
-5
0
5
10
01,0002,0003,000
4 4 5 5 5 6 6 6 7 7 7 8 8 8 9 9
Rate
U
Ago-0
4Di
c-04
Abr-0
5Ag
o-05
Dic-0
5Ab
r-06
Ago-0
6Di
c-06
Abr-0
7Ag
o-07
Dic-0
7Ab
r-08
Ago-0
8Di
c-08
Abr-0
9Ag
o-09
Loans of the Private Banks Annual Growth Rate
Source: Bank Superintendency and Central Bank of Ecuador
Between January-August 2009, the balance of loan portfolio declines in USD 864 millIon(9.2%) compared to december 2008.
On the other hand, up to august 2009, deposits of Other Financial Institutions (*) showed a slight, p g , p ( ) gincrease of USD 81 millIon (4.40%) compared to december 2008
Deposits and Loans of Other Financial InstitutionsUSD MillionsUSD Millions
Dec-07 Aug-08 Dec-08 Aug-09(a) (b) (c) (d)
Annual ChangesAbsolute Relative
(e)= (b) ( )
(f)= (d) ( )
Aug08/ D 07
Aug.09/ D 08
Deposits 1,601 1,872 1,854 1,935 270 81 16.9% 4.4%
Total Loans 2,058 2,357 2,439 2,369 299 -71 14.5% -2.9%Loan Portfolios 1,948 2,232 2,312 2,202 284 -109 14.6% -4.7%n np rf rmin l n 110 125 128 166 15 39 13 5% 30 3%
(b)-(a) (d)-(c) Dec 07 Dec 08
nonperforming loans 110 125 128 166 15 39 13.5% 30.3%nonperforming loan ratio 5.4% 5.3% 5.2% 7.0%
Source: Bank Superintendency and Central Bank of Ecuador
Nevertheless, the total portfolio of OFI, decreased by 2.9% (USD 71 million) compared toDecember 2008.
The nonperforming loans on December 2008-August 2009, presented an increase of about 17 percentage points compared to the same period thus the nonperforming loans ratio rose from 5 2%percentage points compared to the same period, thus the nonperforming loans ratio rose from 5.2%
on December 2008 to 7.0% on August 2009. (*) Include Mutuas, Cooperatives, Private Financial Institutions and Credit Cards.
Credit volume of Private BanksCredit volume of Private Banks
The credit volume decreases in all sectors, mainly in Ene.-Jul.
2008Ene.-Jul.
2009Absolute Relative
USD Millions Annual Changes
consumption and housing. 2008 2009
Commercial 5,279 5,240 -39 -0.7%Consumption 872 655 -216 -24.8%Microcredit 552 469 -83 -15.1%Housing 299 208 -92 -30.6%
Loan porffolios by sector:Private Bank
25%
Total 7,002 6,572 -430 -6.1%
Source: Bank Superintendency and Central Bank of Ecuador
The annual growth of loan portfolio in the commercial
sector consumption housin 5%
10%
15%
20%
25%ow
th R
ate
sector, consumption, housing and microcredit is
negative.
C i l C ti H i Mi dit-15%
-10%
-5%
0%
5%
Ann
ual G
ro
Comercial Consumption Housing Microcredit
Aug 08 - Dec 07 19.2% 9.9% 20.8% 21.5%Aug 09 - Dec 08 -12.7% -4.4% -4.8% -3.3%
Source: Bank Superintendency and Central Bank of Ecuador
From May 28 that the regulation for the domestic liquidity ratio was issued it is observed aFrom May 28, that the regulation for the domestic liquidity ratio was issued, it is observed a significant decline on foreing assests of financial institutions.
Foreing Assets over Deposits
40
42
36
38
40
wth
On May 28th the regulation for the domestic liquidity ratio was issued
32
34
Ann
aul g
row
For everyUSD 100 of deposits are USD 34 13
30
ene
feb
mar ab
r
may jun jul
ago
sep
oct
nov
dic
2007 2008
USD 34,13 abroad.
Source: Bank Superintendency and Central Bank of Ecuador
Foreing Assets of Private BanksForeing Assets of Private Banks(Deposits +Investments)
4,000
4,500
5,000
3.888
3,000
3,500
,
1 500
2,000
2,500Foreing Assets decrease of Financial Institutions by USD 257 million from
August 31st to Septembe
1,000
1,500,
August 31st to Septembe 18th, 2009
Source: Bank Superintendency and Central Bank of Ecuador
According to National Government’s policy of assigning resources to the productive sector theAccording to National Government s policy of assigning resources to the productive sector, thereferential interest rates by type of credit decreased gradually, especially microcredit sector.Nevertheless, during the period January-August 2009, rates tended to stabilize, however, fromJuly the interest rate for consumption sector showed an increase.
Lending rates by type of LoanAnnual Growth
35.00
40.00
45.00
50.00
es
Sector Sep-07 Sep-09 Variation
15.00
20.00
25.00
30.00
Annu
al c
hang
e Productive 10.8 9.2 -1.7Consumption 17.8 18.0 0.1Housing 11.5 11.2 -0.3Microcredit 40.7 30.8 -9.9
0.00
5.00
10.00
Fuente: BCE
Productive Consumption Housing Microcredit