January 17, 2020 / 5:34 PM / a month ago

UPDATE 1-Ecuador economy shrank slightly in 2019 due to strike -central bank

(Adds quotes from central bank general manager)

QUITO, Jan 17 (Reuters) - Ecuador’s economy ended two years of growth and contracted slightly in 2019 due to a national strike that paralyzed the Andean country for two weeks in October and triggered a spate of violence, the central bank said on Friday.

The bank estimated the economy shrank by 0.08% after taking into account losses of $821 million incurred during the protests against cuts in decades-old fuel subsidies. The losses included damage to infrastructure and missed income, especially in Ecuador’s vital oil sector.

Veronica Artola, the central bank’s general manager, told a news conference that the economy was expected to return to growth in 2020 and expand by 0.7%.

As part of a deal with protest leaders to end the strike, Ecuadorean President Lenin Moreno agreed to swap a law that ended fuel subsidies for new legislation that would direct more resources to the needy.

Moreno had previously defended the subsidy cuts as key to efforts to clean up Ecuador’s finances after signing a $4.2 billion loan deal with the International Monetary Fund. But he bowed to pressure as thousands of demonstrators flooded the streets of the capital Quito.

At least seven people died, several hundred were wounded and more than 1,000 people arrested during the protests, which began on Oct. 3, according to the ombudsman’s office, which monitors conflicts. (Reporting by Alexandra Valencia Writing by Angus Berwick Editing by Brian Ellsworth and Richard Chang)

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