In the first quarter of 2024, the Gross Domestic Product (GDP) of Ecuador grew by 1.2% compared to the same period in 2023. This behavior was mainly due to the reduction in imports by 3.3%[1], and by a positive change in stocks (inventories). However, the main components of GDP presented year-on-year contractions: government spending at -0.3%, exports at -0.5%, household consumption at -1.1%, and gross fixed capital formation (FBKF) at -1.3%.
Reduction in imports was due to a contraction in demand for refined petroleum products, vehicles and transportation equipment. Household consumption was affected by the decline in demand for trade and transportation services. For its part, reduction in government spending was based on a decrease in its administrative services. Regarding external demand, the negative behavior of exports was mainly due to lower sales of processed shrimp abroad[2]. Finally, the variation in inventories contributed positively to GDP due to a high accumulation of inventories by companies during the first three months of 2024 compared to the same period of the previous year, due to contractions in internal and external demand[3].
At the industry level, only 10 out of the 20 sectors presented positive performance, among which the following stand out:
- Supply of electricity and water by 12.5%;
- Fishing and aquaculture[4] by 10.8%;
- Exploitation of mines and quarries by 4.3%;
- Technical professional activities by 3.9%
- Real estate activities by 2.9%
Compared to the previous quarter, in its series adjusted for seasonal effects, GDP grew by 3.5% compared to the fourth quarter of 2023, driven by the recovery of exports by 10.6%, of the FBKF by 3.1%, of household consumption by 2.0% while imports decreased by 10.2%, contributing positively to the evolution of GDP. Additionally, government spending decreased by 0.3%. Finally, a slowdown in the accumulation of company inventories was reported compared to the previous quarter, contributing negatively to the performance of the GDP.
More information in the following link (in Spanish)
[1] The contribution of imports confers the opposite sign to the GDP variation rate, that is, the decrease in total imports contributes positively to the performance of GDP, and vice versa.
[2] This product corresponds to the food products manufacturing sector.
[3] See “The variation in inventories and its impact on GDP”(Spanish only) https://www.bce.fin.ec/publicaciones/editoriales/la-variacion-de-existencias-y-su-impacto-en-el-pib
[4] Corresponds to the primary fish and shrimp industry
