Ecuador Cuts Budget After Oil Prices Plunge

Ecuador has cut its 2015 budget by 4 percent due to a drop in export income resulting from the plunge in crude oil prices, the Finance Ministry said on Monday, with cuts to be made to investments and to the government's operating costs.

 

The original budget of $36.32 billion, based on an average oil price of $79.70 per barrel, has been cut by $1.42 billion to $34.89 billion. Oil prices have tumbled, with NYMEX crude trading around $50.55 on Monday, the lowest since 2009.

 

The government said capital spending will be cut by $840 million, targeting projects that would rely heavily on imports and those that can be deferred most easily. Another $580 million will be lopped off spending on government salaries and procurement.

 

The government announced in November it was cutting investment in oil projects that would not affect the country's average 540,000 barrels per day output.

 

President Rafael Correa began an official visit to China on Monday to seek additional credit lines. He has said 2015 will be a "difficult" year due to challenges such as the large expenditures still required to complete construction of several hydroelectric dams.

 

Venezuela's President Nicolas Maduro, whose country has the world's largest oil reserves, announced on Sunday he was also traveling to China and other countries in a trip aimed at boosting his country's finances.