Credit: REUTERS/MARIANA BAZOQUITO, June 30 (Reuters) - Ecuador's economy contracted by 5.6% in the first quarter of 2021 compared with the same period the prior year, the country's central bank said on Wednesday, the latest sign of the impact of the pandemic and related restrictions on the Andean country.
The biggest factors were a decline in government spending, less investment and a drop in household consumption from January to March, the central bank said. The comparable period in 2020 mostly took place before coronavirus restrictions were implemented on March 12.
"The interannual results of the first quarter still reflect an economic contraction due to the spread of the coronavirus during the first three months of the year," central bank General Manager Guillermo Avellan told reporters.
Still, the bank said that economic activity had picked up by 0.7% compared with the fourth quarter of last year. The entity expects the South American nation's economy to grow by 2.8% in 2021 as long as a $6.5 billion financing arrangement with the International Monetary Fund (IMF) remains intact.
The recovery also hinges on the success of the government's vaccination rollout.
President Guillermo Lasso, who took office on May 24 after a 7.8% economic contraction, is seeking to boost private investment in the key oil sector to grow the economy. He has also promised to vaccinate 9 million people against COVID-19 in his first 100 days in office.
Ecuador central bank foresees 2021 growth rebound of 2.8%
(Reporting by Alexandra Valencia Writing by Luc Cohen; Editing by Lisa Shumaker)
((luc.cohen@thomsonreuters.com; +58 424 133 7696; Reuters Messaging: Twitter: @cohenluc))
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