On October 16th, the Executive announced a possible amendment to the General Regulations of the Organic Code of Planning and Public Finances, regarding the calculation of the debt/GDP ratio. It seeks to give transparency to the levels of external debt, in order to give greater credibility to the country in terms of payment capacity and reliability for future credit operations. For this measure to enter into force, it will be necessary to formalize its publication in the Official Gazette. The Minister of Economy and Finance, Richard Martinez, explained that the Executive is doing everything necessary to improve the international reliability of the country at the doors of future external credit contracts.

Martínez appeared this week before the Economic Regime Committee of the National Assembly where he explained the state of the national public debt. He explained that it currently represents 46% of GDP, and that this percentage is likely to increase next year due to the country’s financial needs. In this sense, he clarified that the Executive will continue working on measures that contribute to improve the country’s international reliability in terms of payment capacity.

With this objective in mind, the Executive branch is about to formalize a decree to modify the mechanism for calculating the debt-to-GDP ratio. It will modify the mechanism promoted by Rafael Correa’s government that allowed to calculate as effective income of the Central Government the debt titles and bonds of the Central Bank of Ecuador (BCE), which kept artificially low the levels of external debt. The Executive believes that by repealing and making these numbers transparent, they will be able to ensure better financing conditions.