Ecuador. What an amazing country. After being here nearly three years, its natural beauty still takes my breath away. The diversity of region, culture and climate, the great people, amazing prices, fertile soil, pure water and abundant opportunities are just a few of the things that make this a phenomenal place to be.
Unfortunately, it seems on this planet, governments are hard at work around the clock with new and creative ways to try and destroy all the inherent good in the world.
Certainly that holds true in Ecuador.
And that has been born out in a variety of ways here – a confluence of events has unfolded plunging Ecuador into an economic crisis.
Ecuador’s GDP growth rate is now solidly negative, the IMF predicts a 4.5% contraction in 2016. Low oil prices have forced government cuts to spending and massive borrowing from China. The job market is soft and at the same time banks have stopped lending, putting enormous pressure on borrowers who have leveraged assets during the credit expansion with interest rates in the mid to high teens. At the same time, the government response to all of this has been to increase regulation– a policy that fails 10 times out of 10.
All of this has lead to falling asset prices, closing businesses and some small amount of unrest.
With the economy sputtering, taxes on the rise, the party of the now unpopular president who has been busily implementing socialist policy for a decade will face an interesting test in the 2017 presidential elections.
What does all this mean for you?
If you are looking to retire or just live in Ecuador probably not much. Ecuador is one of the best places to retire to in the world. The quality of life and safety here is exceptional.
If you are looking to start a business, unless it is export or tourist/expat related, you may want to wait until things play out and there is a clearer political and economic direction.
It is an interesting time to be an investor. Capital is leaving Ecuador, and with the economic crisis, prices are falling.
What a time to be cash rich! Many sellers and few buyers. To pick up land or put together a portfolio of beachfront or farmland, this is an amazing time to do so.