Andean Group - November 2006 (ISSN 1741-4466)

In the first eight months of 2006 the country ran a trade surplus of US$1.1bn on exports of US$8.27bn and imports of US$7.18bn. Exports were up 8% in volume and 19% in value in the first eight months. Oil exports were up 4.4% in volume and 36% in value. The trade surplus was the highest since 2000. One problem for policymakers is that that exports are heavily dependent on the US. In August, 56% of the country's exports went to the US; the next biggest market was Peru with 9%. Regionally the Andean countries bought 16% of the country's exports. The European Union bought 11%.

Energy problems: Petroecuador, the state oil company, is talking about importing 20m gallons to diesel to meet looming problems in electricity generation. The country is coming up for the dry season when water levels in its maIn hydro-electric plants falls, hitting electricity output. The president of Petroecuador, Galo Chiriboga, claimed that the shortages were not caused, by inefficiencies at Petroecuador but rather by the smuggling of diesel out of the country. Diesel in Ecuador is substantially cheaper than in Colombia and Peru.

Inflation: In September, inflation was 0.57 %, up from August's 0.21%. This brought the rate for the past 12 months to 3.21 %. In 2005, the rate had been 4.4%.