Correa orders another round of budget cuts as oil prices remain low; Latin oil producers to meet

President Rafael Correa says another round of budget cuts is necessary to protect the economy from low oil prices. The country’s 2016 budget was based on a price of $35 a barrel but the new budget will assume a price of $25.

President Rafael Correa

“This is the hard reality that we must deal with,” Correa said. “We must prepare accordingly.”

Correa also announced that representatives from Ecuador, Mexico, Colombia, Venezuela will meet ahead of the March OPEC meeting to discuss the slump in oil prices. He said the talks will focus on a regional approach to maintaining and increasing oil prices. He also said the Latin America oil producers will advise OPEC on the containing the crisis. “Such low prices as we currently have aren’t good for anyone and are not sustainable,” Correa said.

Official figures show that in 2015 Ecuador lost $7 billion as a result of the decline in oil prices compared to 2014. Oil is the country’s main export and accounts for 50 percent of its international sales. Oil revenue represents about 20% of the national budget.

Details of the new round of budget reductions have not yet been released.