As Ecuadorian GDP price reduction affects
Level of economic involvement and the incidence of increase and reduction of the price of oil in Ecuadorian GDP
Ecuador has stood out for its adequate standards of exports and imports that have allowed him that due to its great marketing it is very controversial and controversial. However, in recent years the commercialization of it has allowed positive progress with respect to GDP. This essay will show the level of economic involvement and the incidence that the increase and decrease in the price of oil in Ecuadorian GDPs has had, in addition the work will demonstrate an argumentation of all the points covered by the issue in order to show the variables and changes it has had in recent years since it has given consequences in society giving both economic, political and socially.
Worldly, the value of oil is usually one of the greatest influential in the economy of a country dependent on this, oil is related to all budgets that help the social works of the country or projects, in addition, so that if the oil price decreases the economic level indices of the country also. Ecuador is among one of the main exporters in Latin America, so a good management of oil income will allow the country to maintain good stability. However, in recent years the price of oil has suffered variations when increasing and decreased due to different factors.
The WTO analysis emphasizes that: the dollarization of the Ecuadorian economy since March 2000 prevents the country from implementing an active and independent monetary policy, which limits its ability to respond to external risks’, although at the same time this this It contributes to ‘macroeconomic stability’.
Within the economic framework by having a good that affects more than 20% in national GDP, it also influences that any import or export affectation that is generated in this good affects the national GDP and also the works that a government can carry out in favor from his town.
Since the event of the oil boom, Ecuador has had different presidents that have not actually carried out good economies to make crude an income that not only pays debts, but also that it makes the country grow economically. This is why the doubt is reflected in all the inhabitants, because instead of having a positive value based on the income that it has in the government on the exports of the products, the debt is paid based on. Ecuador has as GDP around 23% to oil which its product is measured based on the current price of oil sales, that is reflected at the special years in 2008 and 2014, in 2008 the price is It was very high compared to later years such as 2014 since as of December 2014 the price of crude country.
At present, Ecuador is in a large debt so it cannot generate more works, it has not enough capital, since it has to be restored and attached to the new costs that oil is causing it. In addition, the level of inflation and the price established for the basic salary were some of which do not allow people not to make new expenses or debts that can be taken to the future, people will not buy real estate that people cannot Pay in about 5 to 10 years, the same goes for companies and industries in purchases and sales that, when not buying a product that they cannot form, prepare, cause that there are unemployment and having a higher unemployment rate causes less money to circulate in society. This means that people did not have access to public goods or works as before, likewise, spending in the public sector had been very high, so Ecuador was a growth rate greater than 3% which would come to be harmful in a South American country that is in the process of development.
Following the economic cycle, people do not have enough money not to buy and consume products, which would cause companies not to have enough sales to pay their staff, which in turn would lead to unemployment. In addition, public spending is one of the tools that the economy of a country has to have a growth, however, when one abuses the item, it can cause consequences by not having a high enough GDP in different exports and when having One as a large amount can generate a very large influence on the decision making of a country such as decision making in Ecuador. All these effects cope with an economic fall in everything that concerns the consumption of goods and services.
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