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Economy & Business - June 2021

ECUADOR: Lasso faces political tightrope away from state-led development

In his inauguration speech on 24 May, Ecuador’s new President Guillermo Lasso declared that his government will seek not to “minimise the size of the state but rather maximise its capacity to serve the poorest”. Conscious of the aversion to fiscal austerity among a population heavily hit by the economic effects of the coronavirus (Covid-19) pandemic, as well as the need to work with a left-leaning congress, Lasso’s government will face a difficult balancing act in maintaining public approval whilst streamlining the state to balance the books. To do so, it has indicated that government spending will be targeted towards the social needs of the population while spending in less politically sensitive areas will be cut in favour of private sector investment.

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