Ecuador Real
Estate Archive V
Updated July, 23 2005
By
Gary Scott
To help you get a feel of Ecuador
real estate we have posted this special archive that lists many of the hundreds
of messages we have shared with our readers about Ecuador real estate this decade.
A Message from Gary in Ecuador
I am in Ecuador and have a message
from one of the sharpest bankers I know that explains why prices are rising despite
dollarization. Here is what he said.
"Dear Gary, you may recall
that two weeks ago we spoke about Ecuadorian inflation, and that I think that
it is not inflation but price corrections and an indicator of asset prices having
bottomed out.
Walter Spurrier has been quoted
in El Telegrafo along similar lines, and I have translated the main part of the
article for you as follows:
El Telegrafo Guayaquil, November
Spurrier: Prices will have to recuperate
Walter Spurrier, the well known
economic analyst, pointed out that inflation in Ecuador was due to the rapid depreciation
of the currency, to a level of Sucres 25,000 per Dollar. This reflects an enormous
devaluation which has not been compensated yet, "but prices will have to
go up to the level, expressed in dollars, they had prior to the dollarization.
Spurrier indicated that the Government
delayed the increase of inflation in the first months of the year as a result
of reaching an agreement with industry and transport so as to maintain the price
of fuel, gas, electricity and telephone services.
Furthermore, he said that the
Ministry of Education had stopped tuitions from rising at schools, and that these
adjustments will have to take place, but instead of happening during this year,
they will take place in 2001. As a consequence, although the rate will decrease,
inflation will continue during next year.
He pointed out that the prolonged
poor economic policies have impoverished the country and pushed the poorer person's
consumption levels to unacceptable levels. However, the solution is to create
the conditions for an increase in investment, which will generate higher employment.
In this sense, he pointed out
that the solution is not to set "political" prices, for these lead nowhere.
The solution must be directed to improve investment, and this is not being done
with the required diligence.
He added that the President,
Dr. Gustavo Noboa Bejarano, would have to make further adjustments as soon as
possible so as to reduce the expectations of inflation and these are to be made
in products and services provided by the state and those of the private sector
which have controlled prices.
Learn more about dollarization.
We have continual Ecuador
real estate tours.
I hope to see you in Ecuador. Until then, good
investing!
Gary Scott
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