The people of Ecuador are rising up to refound their country as a pluri-national homeland for all. This inspiring movement, with Ecuador's indigenous peoples at its heart, is part of the revolution spreading across the Americas, laying the groundwork for a new, fairer, world. Ecuador Rising aims to bring news and analysis of events unfolding in Ecuador to english speakers.

Friday, July 04, 2008

Ecuador to Seek Foreign Loans as Growth to Quicken, Ortiz Says

By Stephan Kueffner

July 3 (Bloomberg) -- Ecuador, after restructuring its debt twice in the past 20 years, will seek to tap foreign debt markets next year as economic growth speeds up and public-sector debt falls, Finance Minister Fausto Ortiz said.

``Our great challenge in 2009 will be to issue international debt,'' Ortiz told foreign correspondents at the ministry today in Quito.

Economic growth is accelerating after hitting the bottom of the cycle last year, and the government is working to reduce inflation expectations, Ortiz said. By the end of this year, public-sector debt will fall below 25 percent of gross domestic product from close to 40 percent when President Rafael Correa took office in January of last year, he added.

``We are creating adequate conditions to return to international markets,'' Ortiz said. ``It could be one or more placements.'' This year, Ecuador plans to issue $800 million in domestic debt.

The country renegotiated its debt in the 1990s following a default in 1987. It halted payments again in 1999, issuing the benchmark 2030 bonds as part of a settlement a year later.

Correa criticized Ecuador's ``illegitimate'' debt on June 9, saying it was agreed to by corrupt officials. Ortiz has said that the ongoing audit of previous foreign debt issuance is aimed at exposing these practices and ensuring they won't be repeated.

The government won't increase the minimum wage and public- sector wages at last year's pace in a bid to keep inflation in check, Ortiz added. Ecuador may increase subsidies for low-income residents to reduce the impact of inflation early in 2009, Ortiz said.

Inflation has peaked, while GDP growth -- the lowest in the Western Hemisphere last year at 1.97 percent -- is accelerating, he added.

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