NEW EXPENDITURE CUT

ECUADOR - In Brief 19 Aug 2015 by Magdalena Barreiro
Minister of Finance, Fausto Herrera announced that the government will cut $800 million from expenditures in addition to the $1.42 billion announced back in January 2015. Public investment will be reduced by $700 million and current expenditures by $100 million. We already expected a new cut announcement as we established in our recent reports, but in our estimation the reduction should have been of at least $1.2 billion. The Minister assured the government has the resources to assist in the case of an emergency caused by Cotopaxi. The situation with the volcano has remained unchanged these last two days without any increase in activity. On another issue, in our soon to be published Quarterly Report, we comment on the crowding presence of Ecuadorians in shopping malls in the Colombian city of Ipiales --especially during weekends. This obeys to the scarcity or high prices of certain products (due to import controls) and to the strong devaluation of the Peso that is now trading at 3000/USD (60% devaluation in one year). Our border city of Tulcan and the northern provinces have been severely affected by this fast and strong change in trade direction, and the Government has declared the Province of Carchi as "depressed zone" to enable the allocation of special resources for this area.

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