Living in Ecuador is more expensive every day

Posted on March 16, 2016 • Filed under: Business, Economy, Ecuador

Ecuador is more expensive November/2015 reported prices are growing twice in the United States almost every year since 2008 – CPI has dropped in the last quarter by the economic slowdown

Living in Ecuador is more expensive every day. It is the citizens and business insight. But it is also what the figures reflect the World Bank. Prices have gone up in Ecuador more than twice that in the United States almost every year for the last seven years
Only in 2011 and 2013 rising Consumer Price Index (CPI) misses twice, although it is higher than the country that issues the currency in Ecuador.

This is because, analysts agree, liquidity that entered state coffers in the form of oil revenues. The oil boom came with large public investments, salary increases and increased purchasing power of Ecuadorians, according to economist and editor of Economic Analysis, Alberto Acosta Burnet. “Prices continue to rise. Every year. Increase faster than in the US, although now rising more slowly, “he explains.


“There was a sufficient response from the supply to this increase liquidity,” notes Jorge Calderon, Dean of the Faculty of Economics UEES (University of Espiritu Santo). That is, there was more money to use, since the supply has not grown at the same level to meet demand, prices have been increasing. And they have done so at a higher level than in the US because, according to Calderon, Ecuador is “more vulnerable to external pressure commodity” because the national economy depends on the price of raw materials.

Only Panama reports similar to those of Ecuador figures among dollarized economies, including El Salvador. Some years, like 2011, 2012 or 2013 exceeded the country rising prices, but in others (2009, 2010 or 2014), Ecuador became more expensive than the Central American nation.

Price escalation started in the country, according to figures from the Central Bank in September 2013 to reach its highest peak in June this year (4.87% annual inflation) and with safeguards in place, quotas import and technical standards, according to Acosta Burnet, have contributed to the upward trend also in production costs.

Since then, the trend has been downward, accumulating two consecutive months of negative (-0.08% in July and 0.001% in August, according to the monthly inflation report). This behavior is a reflection, according to the dean of the UEES, economic slowdown, which could even deflation in prices.

Despite the public perception that all products prices increased, the teacher explains that the CPI is a weighted indicator of various items such as food, health and transport, among others.
“It is possible that some are more expensive but others fall, for example, on the issue of food are increasingly offers such as milk,” he says. This, traders aiming to attract consumers who, given the situation, and accuse the narrowness of the pocket.

“Now rise less fast, but prices continue to increase from year to year”, adds Acosta Burnet, who does not believe they reach deflation. That is, to become cheaper. Read Article

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