2024-08-19 23:04:49
Exports, despite not going through their best moment, were the main driver for the increase in sales between January and May 2024. Domestic sales with VAT fell by almost 2%.
Both the President of the Republic, Daniel Noboalike your Minister of Economy, Juan Carlos Vega Malohave highlighted, during the last two weeks, the economic revival which would have caused his management.
Among the figures that the Government highlights and that Noboa repeated during his recent interview on Radio Sucre, there is an increase of $2,000 million in the local sales at the beginning of 2024.
However, if you analyze the figure in detail, the reality is that the driving force of sales, between January and May 2024, were the exports and not domestic consumption, which is going through a slow period.
How much have local sales really grown in 2024?
During the first five months of this year, total sales, including local sales and exports, amounted to $90,036 million; while, between January and May 2023, sales reached $87,843.77 million.
If we only look at the global figures, we can conclude that sales actually increased by $2,192.24 million.
But, if it is broken down by each component, the story takes a turn. Thus, sales taxed with IVA fell more than $700 million or -2% between January and May 2024.
According to Carla Miranda, economist and business consultant, it reflects the fall in the household consumptionthe search for cheaper products and less spending on services taxed with VAT such as restaurants.
“The increase in VAT from 12% to 15% has had an initial effect of reducing consumption and sales. That is why, according to the Central Bank, during the first quarter of 2024, what grew the most was the inventory of companies,” he pointed out.
In the case of sales without VAT, the figure rose from $28,372.32 million between January and May 2023 to $29,913.86 million in the same period in 2024. This represented an increase of 5.4%, that is, a little more than $1,500 million.
Thus, the net increase in local sales was actually $822.02 million, which means 1.09% more.
The best month for local sales was March and former Economy Minister Fausto Ortiz has said that this jump occurred because many Ecuadorians took advantage of the month prior to the VAT increase to make some purchases that they had been postponing.
This temporary increase in sales can partly explain, according to Ortiz, the economic growth of 1.2% in the first quarter of 2024, but this does not mean a real recovery of the economy.
Exports have once again become the driving force of the economy
Even though they are not at their best, and products like Shrimp and banana recorded falls of between -3% and -8%, exports were once again one of the main drivers and responsible for the increase in sales during the first five months of 2024.
Thus, according to the export sales information collected by the Internal Revenue Service (IRS)went from $12,535.94 million between January and May 2023 to $13,906.16 million in the same period in 2024.
The result is an increase of 11% or $1,370.22 million more in the first five months of this year.
The fall in shrimp and banana sales, especially in the Chinese marketwas offset by the good performance of cocoa, which grew by 100%, canned fish with 21% more, broccoli with 32% more, fruits with 12%, among others.
Felipe Ribadeneira, executive president of the Ecuadorian Federation of Exporters (Fedexpor)highlighted that the demand for Ecuadorian products in the United States and Europe has allowed the growth of exports.
However, there are problems such as the increase in international transport costs and the lack of a real plan for competitiveness. This could complicate Ecuadorian exports in the future
On the oil side, despite low production, high international prices allowed the oil exports grew by 30% to $4.322 billion between January and May 2024.
Thus, the additional $1,370.22 million in exports accounted for more than 62% or $6 of every $10 increase in total sales of the Ecuadorian economy.
The final breakdown would be: $822.02 million (increase in local sales) + $1,370.22 million (increase in exports) equals the $2,192.24 million increase in total sales during the first five months of 2024. (JS)
Pichincha ($35,564 million) and Guayas ($31,664 million) accounted for 74% of total sales between January and May 2024.
El Oro and Tungurahua lead the top 5 provinces with falling sales
Between January and March 2024, the top five provinces with the largest drop in sales are as follows:
1.- Total sales in El Oro went from $2,890.29 million in 2023 to $2,698.36 million in 2024. That is, a drop of -$191.94 million.
2.- Sales in Tungurahua went from $1,807.44 million in 2023 to $1,925.36 million in 2024. That is, a drop of -$117.92 million.
3.- Sales in Santa Elena went from $515.73 million in 2023 to $486.51 million in 2024. That is, a drop of -$29.21 million.
4.- Sales in Pastaza went from $106.39 million in 2023 to $100.9 million in 2024. That is, a drop of -$5.49 million.
5.- Sales in Imbabura went from $738.34 million in 2023 to $737.98 million in 2024. That is, a drop of around -$857,000.
Source: LA HORA newspaper