Latin American Economic Outlook 2023
Investing in Sustainable Development
Latin America and the Caribbean needs an ambitious and comprehensive investment agenda to embark on a stronger and more sustainable development trajectory. The 16th edition of the Latin American Economic Outlook proposes ways to make this possible through co-ordinated actions by policy makers, the private sector and international partners. It argues that to close existing investment gaps and overcome the region’s structural challenges, it is essential to scale up domestic and foreign investment. These investments should be a catalyst for better quality jobs and an upgraded production structure, harnessing the potential of LAC’s endowments and of the green and digital transitions. Better governance and information are key to promoting effective and efficient public and private investments. Public institutions are fundamental to aligning investments with national development strategies while building stronger social contracts. The report presents a series of options for financing this new investment agenda, including innovative debt instruments and a renewed role for development finance institutions. The report also highlights the importance of reinvigorated international partnerships across the investment agenda.
Also available in: Spanish
Ecuador
Poverty in Ecuador was 25.7% in 2022, above the Latin America and the Caribbean (LAC) average of 24.1%. Extreme poverty fell from 7.5% in 2016 to 6.9% in 2022, below the LAC average (8.3%). The Gini index was 45.8 in 2021, remaining above the LAC average (44.8). Regarding investment and production transformation indicators, total investment in Ecuador decreased from 25.1% of GDP in 2016 to 21.3% in 2022. In the same period, total regional investment increased on average from 20.8% to 21.3%. Notably, in parallel, private investment rose sharply, from 13.1% of GDP to 17.8%, rising above the LAC average (15.8% in 2019). Ecuador’s labour productivity, compared to output per employed person in the United States, decreased from 20.5% in 2016 to 18.2% in 2023, falling further below the LAC average of 27.1% in 2023. The share of exports of high-tech products in total exported manufactured goods was 4.8% in 2021, well below the LAC average (7.2%). Positive perceptions of foreign direct investment (FDI), which declined across the LAC region, dropped sharply in Ecuador, from 83.9% in 2016 to 48.3% in 2020. The country’s tax revenue decreased slightly, from 19.9% of GDP in 2016 to 19.4% in 2021 (below 21.5% as the LAC average). Environment-related tax revenues remained low and almost unchanged, at 0.4% of GDP in 2016 and 0.3% in 2021.
Also available in: Spanish
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