Nov. 29 (Bloomberg) -- Ecuador’s congress approved plans to raise spending by 8.9 percent next year, financed in part by Chinese loans and local bond sales, the government said.
President Rafael Correa’s 2012 budget proposal, which forecasts economic growth will slow to 5.35 percent from an estimated 6.5 percent this year, was approved with no changes in a midnight vote last night, according to a statement published today in the presidential gazette. Spending under the 2012 budget will be $26.1 billion, more than double outlays in 2007, when Correa took power.
Ecuador has had limited financing sources since defaulting in 2008 and 2009 on $3.2 billion of international debt. Next year, the government forecasts a budget deficit of $4.23 billion, or 5.9 percent of gross domestic product, to be funded in part by $600 million in loans from China and $456 million in bonds sold in local markets. This year’s budget aims for a deficit of 6 percent.
Ecuador, the smallest member of the Organization of Petroleum Exporting Countries, sees crude prices averaging $79.7 a barrel in 2012, or $17.30 a barrel less than the median forecast of 36 analysts surveyed by Bloomberg. Inflation will slow to 5.14 percent next year from the 5.5 percent annual increase reported last month, according to the budget.
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