Hoy – January 24, 2002

Country risk was a record. During the year 2000 it was of 50%, now 11%.

ECUADOR IS AN STABLE COUNTRY

GDP growing as well as investment flows improved the foreign perception of our country.

According to the Central Bank of Ecuador (BCE), the country risk of Ecuador closed last Tuesday at 11%. This figure was qualified as an historical record taking into account the EMBI levels.

The BCE reported that the reduction was based in the macroeconomic stability of the country, sustained in the GDP growth (5.4%) during the year 2001.

Foreign investment levels, which surpassed the amount of 184.71 million dollars, and a possible agreement with the FMI are other factors that contributed to the aforementioned improvement.

Ramiro Crespo, economic analyst, adds to the list the factor that oil prices have not decrease as it was foreseen, and the investors’ perception that the Ecuadorian authorities are “talking about an oil stabilization fund and a fiscal reform which avoids assignations in advance”.

Crespo highlights that upon the Argentinean crisis, the U.S. investment funds are assessing their access to new economies countries. For that reason they have search other investment options; Ecuador one of them, which has favor the country.

Greater benefits

A reduction in the country risk is convenient due to the international banks’ perception of Ecuador.

Analysts highlight that a greater risk means the “possibility that bad news occur”, for what a lesser risk binds stability.

Thus, the present levels that register the Ecuadorian country risk shows a good climate for investments, which allows the capital diversification towards non-oil sectors. This factor contributes to create labor source. Moreover, due to a better panorama international credit costs tend to fall.

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