A SHAKY BUDGET

ECUADOR - In Brief 29 Jul 2017 by Magdalena Barreiro

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President Moreno referred to the status of the Ecuadorian economy as "critical" last Friday night when he presented a preliminary version of the Non-Financial Sector Budget for 2017. The assembly will be rest for two weeks and will review the budget after this period. According to the law, the Ministry of Finance has to submit an updated version of the 2017 budget next September. The total budget sums $36,818 million --2% up from last year's and is based on an oil price per barrel of $41,69. He detailed main revenues (in millions) as followsTax revenues: $14,760Capital Transfers: $ 3,241Current Transfers: $ 3,322 Other Revenues: $ 1,609Public Financing: $11,670He did not provide detailed expenditures yet, but mentioned the government priorities as follows:Education: $ 5,198Health: $ 2,779Housing: $ 1,157Social welfare: $ 1,048Defense and security: $ 3,453Therefore, the deficit is estimated to date at $4700 million or around $1000 million below that of 2016 (official figures). According to official estimates for GDP growth for 2017 (slightly below 1%), this deficit might represent around 4.8% to 5% of GDP.Moreno also recognized that public debt sums $41,893 million and does not include other liabilities for an additional $8,000 million. Finally, he stated that contingents are around $4,367 million.We concur with other economic analysts, that the budget as it is, does not show any effort from the government in reducing fiscal expenditures, except for a fall in investment that does not represent an adjustment, but just just lower expenditures due to the completion of projects that are operating since late last year. We also warn our readers, that these numbers correspond ...