Ecuador should meet its economic growth target of 3.7 percent this year as non-oil industries fuel an expansion, Economic Policy Minister Katiuska King said.
Ecuador’s economy, which is rebounding from its worst performance in a decade, has been hampered by a government renegotiation of contracts with private oil companies, King told reporters today in Quito. Inflation is under “control” and the government won’t let energy prices rise next year, she said.
President Rafael Correa signed a decree in July giving the state greater control of crude reserves and forcing oil companies to switch to service contracts from output-sharing accords. The government reached agreements with the majority of oil companies, including Repsol YPF SA, and seized operations from four companies, including Brazil’s state-oil company Petroleo Brasileiro SA.
“Ecuador’s economy is in very good health,” said King. “We had a reduction in private oil production which is the result of an oil contract renegotiation process,” but “this trend in the oil sector will change.”
The central bank lowered its 2010 gross domestic product forecast to 3.7 percent from 6.8 percent on Aug. 10. The economy expanded 0.4 percent last year and posted growth of 2.7 percent in the second quarter from the previous year, the weakest among major Latin American economies after Venezuela, which is in recession.
In October, consumer prices rose 0.25 percent from the previous month and 3.46 percent from a year earlier.