Real GDP growth, y-o-y -.- --.- --.- -.- -.- -.- -.- -.- -.- -.- -.- -.- GDP per capita, USD -,--- -,--- -,--- -,--- -,--- -,--- -,--- -,--- -,--- -,--- --,--- --,--- e/f = BMI estimate/forecast; Source: BCE, BMI to the government s involvement in the economy. Over the coming five years, as the country rebuilds market confidence, growth will average -.- . ...We forecast that by ----, private consumption s share of GDP will fall to --.- . Even though private consumption growth is set to remain positive, it will be below both the narrowing of the net exports deficit and expan- sion of long-term fixed investment. Government Consumption: The government s share of GDP was --.- of output in ----, its highest level in a decade. ...Exports will also see their share of total output fall to --.- from --.- in the years ahead.
...The government, though maintaining its social spending, will reduce expenditures on infrastructure and other capital spending projects. This will significantly temper real fixed investment in Ecuador given that the economy has become heavily reliant on government financed fixed investment projects. ...The country scores --.- out of --- in our Operational Risk Index, compared to the emerging market average of --.- and a global average of --.-. Given this, we believe that the Ecuadorean government will, in the near term, look to draw investment into its housing sector, which has begun to serve retirees from the US. Ecuador has become an extremely attractive destination for US retirees and tourists given its natural beauty and use of the US dollar as legal tender, which has streamlined travel. Moreover, comparatively cheap costs for goods and services make it a popular destination as the purchas- ing power of US citizens will continue to support spending. The government will likely offer tax incentives for firms willing to expand hospitality operations to capitalise on its tourism potential.
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