Ecuador: Selected Issues Paper and Analytical Notes
IMF Staff Country Reports, March 20, 2019
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- Ecuador: Selected Issues Paper and Analytical Notes
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Bibliographic details
- Published: March 20, 2019
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781498303675.002
Potential growth estimates
- The paper estimates Ecuador’s potential growth in the range of 1 3/4 to 3 percent.
- The lower estimate corresponds to an extrapolation of recent trends.
- The higher estimate could be achievable through the implementation of a reform agenda that addresses fiscal and competitiveness challenges of Ecuador.
Growth accounting and drivers of recent performance
- A simple growth accounting exercise decomposes Ecuador’s growth between production factors accumulation (capital and labor) and total factor productivity.
- The study shows that low total factor productivity is the reason behind Ecuador’s recent economic decline and has been a negative contributor to long-term growth.
- The oil sector remains an important driver of economic activity; however, it is not as important as it once was.
Nowcasting and forecasting GDP
- The paper develops models to nowcast and forecast GDP to improve the accuracy of growth projections.
- Different vector autoregression models are explored to identify the best one to forecast real GDP in Ecuador.
Policy implications and reform agenda
- Achieving the higher potential growth estimate (3 percent) would require implementing a reform agenda that addresses:
- Fiscal challenges.
- Competitiveness challenges.
Content in this bundle
- Ecuador: Selected Issues Paper and Analytical Notes ; IMF Country Report No. 19/80; March 1, 2019