This weekend the Ecuadorian country risk was located at 1,341 points on Sunday, March 3.
Ecuador's country risk continues to decline. The factors that have led to the indicator continuing to decline would be, on the one hand, the tax measures proposed by the government of Daniel Noboa and approved by the Assembly and, on the other, an announcement recently by President Noboa, abroad, of that there would be an agreement with the International Monetary Fund (IMF).
This weekend the country risk stood at 1,341 points on Sunday, March 3. This is a drop of 79 points since February 29 when it stood at 1,420 points.
Furthermore, the 1,341 points is a lower figure than the score registered on February 6, 2023 (1,415). At the end of December and in the first days of January, the indicator had been above 2,000 points. The higher the risk, which is measured by JP Morgan, represents a worse perception of the country's possibilities of paying the debt.
The decrease in the indicator is the result of the measures that the government has taken to reduce the fiscal deficit. The government has sought an aggressive deficit reduction via taxes, comments Alberto Acosta Burneo, editor of Analysis Weekly .
In a few months, he has sent laws that have tax adjustments that could generate liquidity for Ecuador of US$ 4.3 billion. “The government has achieved a spectacular increase in taxes, something unimaginable,” says Acosta.
In this sense, the international market reads this situation as there is a lower possibility that the government will stop paying the external debt. This gives confidence to the market.
Additionally, on President Daniel Noboa's last trip to the United States, in which he met again with investors, he said that a new agreement with the IMF would be close. This would further increase confidence with investors.
However, for Acosta, the problem with what has happened is that the government has sought to reduce the deficit by increasing income through taxes, but not by cutting spending.
In other words, according to the expert, the Ecuadorian government has chosen to pass the bill to citizens, banks and companies. This means less liquidity in the economy, which results in less consumption by people, less credit from banks and less investment from companies.
