Welcome to Grupo Spurrier
Grupo Spurrier is the leading company in the provision of strategic information on economic and political issues regarding Ecuador, which we monitor through Weekly Analysis and Análisis Semanal. We specialize in economic research, competition advice, market research, business plans, and workshops in economic scenarios and regulatory changes.
Weekly Analysis Briefs
WA-2024-30: BCE: "RECESSION PHASE"
We are in a recession phase, says the BCE, but at the same time, according to its latest national accounts update, the economy grew by 1.2% in Q1. How can this apparent discrepancy be explained? How is household consumption faring? Investment? Which are the most dynamic sectors of the economy? In the past month, how have sales been? Exports? Imports? Interest rates? What are the expectations for the second half of the year? In this edition we update our review of the economy's performance based on the indicators available as of mid-July. WA#26 contains the review with indicators available at the end of June.
EDICIÓN ESPECIAL: ¿CÓMO SUPERAR LA CRISIS ELÉCTRICA?
Desde octubre de 2023, los apagones son recurrentes. Estas desconexiones coincidieron con el fenómeno de El Niño que produce estiaje en la cuenca amazónica en donde se ubica la mayor parte de las hidroeléctricas. Sin embargo, este fenómeno climático recurrente no es la causa de fondo de la crisis del sector eléctrico ecuatoriano. La verdadera causa es la insuficiente inversión en generación, transmisión y distribución debido a un modelo estatista que bloqueó la inversión privada y puso toda la responsabilidad en un Estado que ya lleva una década de ajuste fiscal. ¿Cómo se evidencia la falta de inversión en generación, transmisión y distribución? ¿Cuál es el verdadero impacto económico de la crisis energética? ¿Cuánto dinero se requiere y qué cambios regulatorios son necesarios para poner en orden al sistema eléctrico?
WA-2024-29: IMF CALLS FOR BETTER REGULATION
The agreement with the IMF includes several recommendations for the financial system: strengthen supervision and coordination among involved agencies, improve capital and liquidity frameworks, reinforce the financial safety net, and gradually eliminate political price controls on interest rates. In Q2 deposits grew again. However, this expansion remains insufficient to ease a restrictive financial environment. The major challenge for the financial system is its limited funding capacity, as it relies primarily on domestic deposits. The Correa administration deepened the policy of restricting capital flows and self-isolation from international financial centers. Will interest rates continue to rise? Will credit remain restricted? Which credit segments are expanding the most? Why is delinquency increasing? What is the state of financial innovation and the advancement of fintech? Why has banking profitability declined? What is the risk rating and CAMEL rating of each bank?
WA-2024-28: A SWARM OF PRICES
The president issued an executive order to put order in fuel prices. There are dozens of prices, in the government's attempt to favor some consumers and charge more to others. Additionally, the price of Extra gasoline, with or without ethanol, was raised. Does the new gasoline price end the subsidy? What can be expected of gasoline prices in the future? Why does PetroEcuador say that Ecopaís has more subsidy than Extra? What can be expected of diesel prices? What distortions does the variety of prices produce? What does the new natural gas regulation say and what results will it bring?
WA-2024-27: TAX REFORM ON THE WAY
2023 was a poor tax collection year, down due to a combination of a sharp rise in credit notes and refunds, lower collection of temporary contributions, import taxes, and ISD. The economic slowdown took its toll. The situation differs sharply in 2024. President Noboa managed to get the Assembly to approve three reforms that introduced strong tax measures, with tax revenues estimated to increase by $2.57B or 17.1% in 2024. Why won't these reforms be enough to address growing fiscal woes? What is the revenue increase goal for 2025? What tax legislation changes are to be expected How much should a new tax reform, planned to come into effect in 2026, yield? What would it include? Which industries are the most profitable? Who are the largest taxpayers? Who are the top 100?
WA-2024-26: ELECTRIC MELTDOWN
June has been a month of leaps and bounds. The unexpected nationwide blackout, the announcement of the imminent rise in gasoline prices, the erosion of the Coca Riverbank forcing the shutdown of the OCP, and the disbursement from the International Monetary Fund. How does the electrical landscape change with the blackout? What is the economic impact of the OCP shutdown? What will the gasoline price increase look like, and what can be expected from the monthly adjustments? What are the IMF funds being allocated for? What is the current performance of the economy? How do these events alter short-term performance prospects? In this issue we update our review of the economy's performance based on indicators available as of Late June. WA#21 brings the review of indicators available as of mid-May.