Inflation in Ecuador had fallen for months and in negative until July of this year, when the consumer price index began to rebound, hitting the pockets of Ecuadorians, already weighed down by the crisis generated by the pandemic. The price index has reached 1.30% in the accumulated of the year and 1.07% in September, compared to the same month of the previous year. These cold figures include the rebound in prices in the Latin American country in transport, education, food and housing in response to two factors: the rise in international oil prices coupled with the withdrawal of state subsidies and the reactivation of life once that the vaccine against covid-19 reached millions of Ecuadorians.
The increase in the cost of living is seen in statistics and is also felt on a day-to-day basis. In the food markets, which sell fruits, vegetables and meats to both wholesalers and individuals, prices have risen by pennies. Five or 10 cents on fresh produce or half a dollar on meats. It depends on the day, the market and what the supplier of the goods that come from the countryside to the cities has demanded. The rising cost of gasoline, with a public subsidy on the way to extinction, has fueled speculation in the chain of intermediaries between the producer and the consumer, although officially, the basic basket has become more expensive than just under two dollars a year for another: from $ 711.03 in September 2020 to $ 712.85 this September. The monthly family income, on the other hand, remains the same $ 746.67.
This modest official increase in the set of 75 products of habitual consumption measured by the National Institute of Statistics and Censuses does not reflect, however, the incidents in the movement of goods within the country due to the threat of transporters to stir up the protests. The government of former President Lenín Moreno eliminated gasoline subsidies in July of last year, applying a system of bands that smoothed out drastic increases or decreases in crude prices each month. And the Executive of Guillermo Lasso still negotiates with them and with representatives of the indigenous movement, who live mainly from agriculture in rural areas, to alleviate the effect of the disappearance of state aid.
The upward inertia of the price of a barrel and the gradual release of fuels in Ecuadorian territory have raised the bill delivered by gas stations. A year ago, trucks and buses paid $ 1 per gallon for diesel and now $ 1,652. The same with taxis and private vehicles that use extra gasoline (low octane) or eco-country – the two most used – that a year ago had a fixed price of $ 1.75 and this October they are already at $ 2,391. The increase in the barrel of Texas, which is the one used by Ecuador as a reference and which is close to 80 dollars, has lengthened the duration of the state subsidy for a few months until the consumer price is completely liberalized.
The impact of the rising price of oil also appears in the latest INEC inflation report. Transportation is the activity with the greatest variation in the annual consumer price index, with 0.789%. Within this group, not only the extra gasoline (4.20% monthly inflation), the eco-country (4.39%) and diesel (2.39%) have risen, but other derivatives that push prices such as oils and lubricants (3.22%) and tires (2.07%).
The cost of living has also become more expensive for Ecuadorians through education (0.117% of annual CPI), housing (0.083%) and health (0.069). The Institute of Statistics details in these areas significant price increases in paint for houses and, to a lesser extent, rent, or in initial and primary education. Despite the crisis derived from the pandemic stoppage, these items have been awakening with the reactivation of activities and this is seen in the acceleration of inflation in July, August and September. The three months reversed the accumulated inertia and closed positively. At the end of August, Ecuador had more than nine million people vaccinated against the coronavirus.