Ecuadorian Government Has Delays in Payments for Over 4 Billion

On Monday, the Ecuadorian Economy Minister Juan Carlos Vega admitted that President Daniel Noboa's administration has accumulated delays in payments totaling US$4.3 billion.

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After Noboa assumed power in November, Vega warned about the complicated economic situation, which worsened after the first "giant effort" made to cover salaries for that month.

"The delays have accumulated even more. Since we took over the administration until now, the balance has increased from US$2.8 billion to US$4.3 billion... We fulfilled our responsibilities, but obviously, it only worsened in December," the Economy minister said.

The pending accounts are spread among social security, subnational governments, public entities, and state suppliers. Among the top priorities to address, Vega mentioned security, health, potential effects of the El Niño phenomenon, salaries, and transfers mandated by the Constitution and the law.

The projected fiscal deficit for the year-end will exceed US$5.7 billion, equivalent to 5 percent of the Gross Domestic Product (GDP). Vega also admitted that the consolidated public debt until September approached US$60 billion.

Over the last year, Ecuador experienced a decline in oil production and fiscal revenues due to the reversal of the tax reform and the increase in international interest rates.

Noboa's Economy Minister acknowledged that "barely" a 1.5 percent GDP growth would be achieved this year, much lower than the initial growth projection of 3.1 percent.

The economy might recover with potential private investments of around US$700 million directed towards a wind park in the province of Loja and a photovoltaic park in El Aromo in the province of Manabi. However, the growth forecast for 2024 does not exceed 1 percent of GDP.