Ecuador’s unicameral National Assembly voted on November 29 to return the 2019 Budget Bill with recommendations to the executive office, which will have to accept them or ratify the original proposal before December 10. The bill contains steep reductions in government spending, especially in education and health sectors. Meanwhile, reports indicate the government has been making consultations with other regional countries about their recent agreements with the International Monetary Fund (IMF), suggesting Ecuador will likely request an IMF’s bailout agreement soon.
As previously assessed, the Ecuadorian economy is not poised to grow in the short term despite recent announcements of investments in oil projects. The International Monetary Fund (IMF) recently reduced expected growth figures for Ecuador during 2018 and 2019. Considering that Ecuador’s economy is reliant on oil, international crude prices constitute a key variable on macroeconomic forecasts. In this context, the recent downward trend in international crude oil prices will diminish the amount of revenue that the Treasure will have, adding to the need for budget cuts for the next year. Precedent suggests that student organizations will most likely continue to protest in Quito and Guayaquil against the perceived deterioration of education budgets. Although larger student demonstrations would likely cause traffic disruptions, protests are unlikely to devolve into violence.