Public Debt And Economic Development

Public debt and economic development

Introduction

Ecuadorian public debt from 1999 to 2019 has not remained stable, since in the first year of our analysis it was at its highest point with 85.5% of GDP, which represents USD 19.635.5 million, this because of bank salvage, he devalued from the national currency and the subsequent adoption to the US currency, making it totally unsustainable, causing the greatest emigration recorded in Ecuador, after this remittances from abroad, the abroad, theCreation of new companies and the development of the main provinces, gradually decreased the accumulated unlissance, goes to existing political instability.

Developing

In 2009 Ecuador registered 16.4% of total debt with respect to GDP, being the lowest so far, a cauda of the oil boom in which the barrel reached a price of $ 121.66 and the ignorance of part of theexternal debt by the government. On the other hand, as of 2010 in the period of Rafael Correa, the increase in the state’s appliances, the construction of great works for the change of the productive matrix, excessive current expense, the expense for reconstruction after the 2016 earthquake, high ratesIn loans, low productivity and bad political decisions caused a progressive and uncontrollable increase in external and internal debt.

Because of these current debt amounts to 45.3% of GDP according to the latest government report, the unsustainability of the current debt has induced for the State to take measures with low popular acceptance.

The maximum legal basis of public debt is 40% compared to GDP, since 2017 it is above the optimal level, hence it has remained unsustainable, even more the unemployment level located at 4.6%, theLow internal production, the high immigration rate, causes the country to be 823 points, which leads to a much higher interest rate when the country more financing requires. 

conclusion

The future landscape is not encouraging in the economic and social. The main objective of this research is to determine the relationship between public debt and economic growth in terms of sustainability in the same way has the intention of contributing to the best understanding of the problem of public sector indebtedness and the search for instruments or mechanisms that maybe used in Ecuador for adequate management and possible reduction of the current debt with the least possible social impact.