World Bank to discuss approval for credit line to Ecuador
The World Bank Board of Directors will meet virtually today to decide on and likely approve another $500 million credit line to Ecuador.
Should it be approved, the loan will be the third from the World Bank to Ecuador in seven months—previous approvals saw the country receive $500 million in May and $260 million in July. Although Ecuadorian Finance Minister Mauricio Pozo claims the country’s economy is in recovery, the IMF forecasts that Ecuador’s economy will shrink 9% this year as a result of the COVID-19 pandemic.
Ecuador’s economic crisis is expected to feature prominently in the presidential election slated for February 2021. Anticipate debate over managing Ecuador’s debt—currently at 8.9% of GDP but expected to increase to 17% by the year’s end—to be a central issue of the campaign season. For example, former president Rafael Correa’s choice candidate, former central bank director Andres Arauz, has already expressed a desire to follow in his endorser’s footsteps. He seeks to prioritise fiscal spending targeting poverty and crime over austerity measures to reduce the debt.
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