Quito.- Ecuadorian President Lenín Moreno announced on Tuesday an economic package involving fiscal austerity measures, economic contribution of public employees and debt refinancing, among others, to address the economic consequences caused by the COVID-19 outbreak and the significant reduction in oil prices. On a radio and television station, the representative said that «circumstances as complex as the ones we live in now need responsible decisions. The homeland requires this effort and that this effort is accompanied by the commitment, contribution and solidarity of all».
It added that it had arranged a budget cut of $1.4 billion, with the exception of the health sector; a temporary contribution of a percentage — which did not detail — of the salary of public employees, a contribution of 5% of the value of vehicles worth more than $20,000, refinancing of external debt, and an increase in withholding tax on large companies. Ecuador registers a total of 14 confirmed cases of COVID-19 and about 150 people undergoing an epidemiological fence to prevent its spread. For this year’s budget, the government had estimated the price of a barrel of crude oil at $51.3. The sharp fall on the eve to $31.13 will have a severe impact on tax revenues. Ecuador exports about 332,000 barrels per day for approximately $8.8 billion per year. In turn, the rest of exports have also been affected by delays and cancellations resulting from the situation in China, one of the main markets for Ecuadorian products. Hours earlier, Moreno said that in the morning he had spoken to representatives of the International Monetary Fund and the World Bank «because regardless of the difficulties we have had, they know perfectly well all the effort we have put into meeting the conditions we have mutually agreed.» Ecuador is in a situation of recurrent liest of the tax box. To resolve it, in October he attempted to reduce the million-dollar fuel-price subsidy, triggering violent protests that forced the government to backtrack on the measure. The imposition causes arrears in the payment of salaries to public employees and suppliers of the State.
Ecuadorian Brothers: Coronavirus is creating an economic crisis around the world. This, coupled with the drastic fall in the price of oil, has hit Ecuador hard. To respond to the situation, the #ElGobiernoDeTodos makes responsible decisions: pic.twitter.com/qt5WNl3NvI — Lenín Moreno (@Lenin)
March 11, 2020