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Ecuador Banks Increased Loans Spurring Rebound, Policy Minister King Says
Ecuador’s economy is “in a recovery phase” and growth picked up in the second quarter as commercial lending increased and businesses boosted output and added workers, Economic Policy Minister Katiuska King said.
Loans to construction, retail and agricultural companies grew as much as 54 percent in April and May over the same period a year earlier, fueling an expansion in the country’s non-oil industries and raising government tax revenue, King said yesterday in an interview in her offices in Quito.
South America’s seventh-biggest economy won’t meet the government forecast for a 6.8 percent expansion in 2010 and the estimate will be cut after the steepest decline in oil revenue since 2007 in the first quarter, King said. Lower-than-predicted government spending and investment by private oil companies have also curtailed gross domestic product, she said.
“The outlook for the second quarter is more favorable than the first,” King, a 34-year-old economist, said without giving exact figures. “There’s been a reactivation in industrial loans, there’s more production and consumer demand is also increasing.”
Ecuador’s GDP grew 0.33 percent in the first quarter from the previous three-month period and 0.6 percent from the same period a year earlier, according to the central bank. Second- quarter economic data is scheduled to be published in October.
Construction lending rose 29 percent in April and May from the same two-month period in 2009, according to a report provided by the minister. Wholesale and commercial retail credits rose 54 percent, transportation and storage lending increased 119 percent and loans to agricultural companies rose 38 percent in the same time period, according to the report.
Ecuador’s unemployment rate fell to 7.7 percent in the second quarter from 9.1 percent in the three months ending in March, the National Statistics and Census Institute said yesterday.
“We’re seeing an improvement in credit, and credit is fundamental in order to generate and reactivate the productive machine,” King said. “We are in a recovery phase.”
To contact the reporter on this story: Nathan Gill in Quito at ngill4@bloomberg.net
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