Ecuador - Balance of payments



Ecuador's balance of payments showed repeated deficits on current accounts until the vast increases in petroleum exports during the 1970s; only in 1974 did the net balance finally register a surplus of $26.7 million. International reserves rose steadily from $57.3 million in 1967 to $64.7 million in 1971, increased dramatically (with the rise in oil exports) from $143.4 million in 1972 to $1 billion by December 1980, and then dropped (as the oil market softened) to $304 million at the end of 1982, but were up to $500 million by 1987. In 1992, currency appreciation caused a narrowing in the trade surplus, which pushed down international reserves. In 1994, increased production in the petroleum, banana, construction, and manufacturing sectors generated growth of 4%, up from 3% the year before, helping Ecuador post a merchandise trade surplus of $435 million. The surplus, however, was offset by a deficit on the services account resulting in a current account deficit of $807 million. Increased exports in 1995 were partially offset by increased military imports due to the conflict with Peru. The current account deficit in 1997 also showed an increase of military imports with a deficit of $734 million (according to the US embassy in Ecuador). The 1998 peace agreement with Peru assuaged the balance of payments deficit, but by that time the flight of private capital due to the unstable political situation had precipitated a negative turn in the economy. Capital flight still remained a problem in the early 2000s, due to a difficult investment climate, a fragile banking system, and continued economic and political uncertainty.

External debt was approximately 80% of GDP in 2000, an improvement over 1999 when the debt-to-GDP ratio was 100%, due in large measure to the depreciation of the sucre prior to dollarization.

The US Central Intelligence Agency (CIA) reports that in 2001 the purchasing power parity of Ecuador's exports was $4.8 billion while imports totaled $4.8 billion resulting in a trade surplus of $0 million.

The International Monetary Fund (IMF) reports that in 2001 Ecuador had exports of goods totaling $4.86 billion and imports totaling $5.33 billion. The services credit totaled $911 million and debit $1.43 billion. The following table summarizes Ecuador's balance of payments as reported by the IMF for 2001 in millions of US dollars.

Ecuador

Current Account -800
Balance on goods -462
Balance on services -519
Balance on income -1,363
Current transfers 1,544
Capital Account -67
Financial Account 1,007
Direct investment abroad
Direct investment in Ecuador 1,330
Portfolio investment assets
Portfolio investment liabilities 117
Other investment assets -1,308
Other investment liabilities 868
Net Errors and Omissions -399
Reserves and Related Items 259
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