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LatinNews Daily - 02 July 2020

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In brief: Q1 decline bodes poorly for Ecuador

* Ecuador’s central bank (BCE) has reported that the country’s economy contracted by 2.4% year-on-year in the first quarter of 2020. The BCE attributed this decline primarily to reduced investment (reporting a 6% fall in gross fixed capital formation) and public consumption (down by 0.6%). These results suggest that Ecuador’s economic difficulties preceded the coronavirus (Covid-19) pandemic, the impact of which only began to be fully felt in March, at the end of the quarter. The quarterly economic contraction, despite being the largest recorded since President Lenín Moreno took office in 2017, is likely to be just the tip of the iceberg; the all-important oil sector, which has been hit particularly hard in recent months, even reported 1.9% year-on-year growth in the first quarter. The BCE currently anticipates that the economy will contract by up to 9.6% in 2020.