Ecuador Economy Profile 2008

Economy - overview

Ecuador is substantially dependent on its petroleum resources, which have accounted for more than half of the country's export earnings and one-fourth of public sector revenues in recent years. In 1999/2000, Ecuador suffered a severe economic crisis, with GDP contracted by more than 6%, with a significant increase in poverty. The banking system also collapsed, and Ecuador defaulted on its external debt later that year. In March 2000, Congress approved a series of structural reforms that also provided for the adoption of the US dollar as legal tender. Dollarization stabilized the economy, and positive growth returned in the years that followed, helped by high oil prices, remittances, and increased non-traditional exports. From 2002-06 the economy grew 5.5%, the highest five-year average in 25 years. The poverty rate declined but remained high at 38% in 2006. In 2006 the government of Alfredo PALACIO (2005-07) seized the assets of Occidental Petroleum for alleged contract violations and imposed a windfall revenue tax on foreign oil companies, leading to the suspension of free trade negotiations with the US. These measures, combined with chronic underinvestment in the state oil company, Petroecuador, led to a drop in petroleum production in 2007. PALACIO's successor, Rafael CORREA, raised the specter of debt default - but Ecuador has paid its debt on time. He also decreed a higher windfall revenue tax on private oil companies, then sought to renegotiate their contracts to overcome the debilitating effect of the tax. This generated economic uncertainty; private investment has dropped and economic growth has slowed significantly.

GDP (purchasing power parity)

$98.28 billion (2007 est.)

GDP (official exchange rate)

$44.5 billion (2007 est.)

GDP - real growth rate

2.6% (2007 est.)

GDP - per capita (PPP)

$7,100 (2007 est.)

GDP - composition by sector

agriculture: 10%
industry: 35%
services: 54% (2007 est.)

Population below poverty line

38.3% (2006)

Household income or consumption by percentage share

lowest 10%: 2%
highest 10%: 35%
note: data for urban households only (October 2006)

Inflation rate (consumer prices)

3.3% (2007 est.)

Investment (gross fixed)

26.4% of GDP (2007 est.)

Labor force

4.55 million (urban) (2007 est.)

Labor force - by occupation

agriculture: 8%
industry: 24%
services: 68% (2001)

Unemployment rate

9.8% (2007 est.)

Distribution of family income - Gini index

46
note: data are for urban households (2006)

Budget

revenues: $13.1 billion
expenditures: planned $11.3 billion (2007 est.)

Public debt

30.4% of GDP (2007 est.)

Industries

petroleum, food processing, textiles, wood products, chemicals

Industrial production growth rate

1.4% (2007 est.)

Electricity - production

12.94 billion kWh (2005)

Electricity - consumption

8.855 billion kWh (2005)

Electricity - exports

16 million kWh (2005)

Electricity - imports

1.723 billion kWh (2005)

Oil - production

538,000 bbl/day (2005)

Oil - consumption

162,000 bbl/day (2005)

Oil - imports

44,680 bbl/day (2004)

Oil - exports

420,600 bbl/day (2004 est.)

Oil - proved reserves

4.63 billion bbl (1 January 2006 est.)

Natural gas - production

249.4 million cu m (2005 est.)

Natural gas - consumption

249.4 million cu m (2005 est.)

Natural gas - exports

0 cu m (2005 est.)

Natural gas - imports

0 cu m (2005)

Natural gas - proved reserves

9.369 billion cu m (1 January 2006 est.)

Current Account Balance

-$600 million (2007 est.)

Agriculture - products

bananas, coffee, cocoa, rice, potatoes, manioc (tapioca), plantains, sugarcane; cattle, sheep, pigs, beef, pork, dairy products; balsa wood; fish, shrimp

Exports

$13.3 billion (2007 est.)

Exports - commodities

petroleum, bananas, cut flowers, shrimp, cacao, coffee, hemp, wood, fish

Exports - partners

US 53.6%, Peru 8.2%, Colombia 5.6%, Chile 4.4% (2006)

Imports

$13 billion (2007 est.)

Imports - commodities

industrial materials, fuels and lubricants, nondurable consumer goods

Imports - partners

US 23.1%, Colombia 13.3%, Brazil 7.3%, Panama 4% (2006)

Reserves of foreign exchange and gold

$3.618 billion (30 November 2007 est.)

Debt - external

$17.56 billion (31 October 2007)

Stock of direct foreign investment - at home

$14.67 billion (2006 est.)

Stock of direct foreign investment - abroad

$8.442 billion (2006 est.)

Market value of publicly traded shares

$4.04 billion (2006)

Economic aid - recipient

$209.5 million (2005)

Currency (code)

US dollar (USD)

Exchange rates

the US dollar is used; the sucre was eliminated in 2000

Fiscal year

calendar year