The Andean country's economy grew 2.4% in 2023, although it has registered a significant quarterly deterioration. This is indicated by the figures from the local Central Bank.
Remittances from Ecuadorians residing abroad reached a record amount of US$5,447 million (equivalent to 4.6% of GDP) in 2023. This means almost 15% more than in 2022. Although the growth in remittances It is a regional phenomenon, those that arrive in Ecuador grow more than the regional average.
According to preliminary estimates from the World Bank, in 2023 the remittances that arrived in Latin America totaled US$156 billion, that is, 8% more than in 2021.
In parallel, the Central Bank of Ecuador also reported that Foreign Direct Investment (FDI) was the lowest since 2016. Only an FDI of US$372 million was recorded, equivalent to only 0.3% of GDP.
In recent years, FDI had been around 1% of GDP; While in countries like Chile, Colombia or Peru, this indicator used to represent between 3% and 5% of the gross domestic product.
In this way, a relationship between FDI and remittances is presented that is contrary to what would be desirable, since an economy that attracts private investment (external and also local) and that, consequently, generates many jobs, means that citizens have . fewer incentives to leave the country and help their families from abroad.
This is analyzed by the Development Studies Corporation (Cordes) in a recent report on the country's economic situation.
According to Cordes, the growth of remittances can be positive news, however, behind these money transfers from abroad is an economy that does not provide enough opportunities to its citizens, which causes family breakups and the departure of human capital. . .
GROWTH OF ECUADOR IN 2023
On the other hand, according to its preliminary figures, the Central Bank of Ecuador reported that in 2023 the Ecuadorian economy grew 2.4% compared to 2022.
This result reflects a deterioration throughout the year, since the GDP in the first quarter had registered a growth of 4.9%, but towards the fourth quarter a contraction of 1.2% was recorded in the last one, always in year-on-year terms.
- Within GDP, household consumption had a similar behavior, registering positive results in the first two quarters of 2023, but falls in the last two; In the entire year, household consumption grew by just 1.4%.
- Public consumption, for its part, grew by 3.7% in 2023, but its performance also shows a marked slowdown. The same happened with exports (of goods and services, measured in volume), which grew 9.5% in the first quarter of the year, but contracted 7.5% in the last quarter.
- Thus, in the entire year, sales abroad grew at a rate similar to that of the economy as a whole: 2.3%.
- On the contrary, imports, although they registered a drop of 0.9% throughout 2023, showed a notable rebound in the last quarter of the year, when they grew 16.2%, while in the three previous quarters they had recorded results . negative year-on-year.
