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Ecuador Requires Another US$ 4,000m for its Reactivation after Covid-19

12.6.2020

After 77 days of an almost complete stoppage caused by COVID-19, more than 150,000 people have been made unemployed and another four million informal workers are without any kind of sustenance, according to the Minister of Productivity and Commerce, Iván Ontaneda, because of this the Andean country requires another US$ 4,000 million to reactivate its economy which is aimed at the productive and economic reactivation of the country, Ontaneda said in an interview.

So far, and with international aid, US$ 1.15 billion has been injected into an assistance fund for small and medium-sized companies that according to the minister "is not enough to cover all of the country’s needs."

With a swollen debt before the pandemic and a budget deficit beyond all expectations, the Ecuadorian government found itself against the wall in the wake of COVID-19 and has appealed for international aid as its main salvation.

At the same time, it has begun to reduce public spending to deflate the state apparatus and channel subsidies to pressing social emergencies.

The World Bank estimated that the Andean country's GDP will contract 7.4% this 2020, an optimistic figure compared to those of the Central Bank of Ecuador, which warns that it could reach 9.6%.

It has also been affected by the fall in international markets of the price of oil, the country's main export product and the primary source of foreign exchange income for its dollarized economy.

"To return to the markets, Ontaneda said, the country must overcome its "liquidity" problem and inject the necessary resources into the production chains.

Dollarized since 2000, the Ecuadorian economy cannot devalue "to adjust the fiscal deficit", so it only has the solution of "seeking resources externally".

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