Ecuadorian households only save $83 dollars a month
The statistics agency INEC has released their yearly data about Ecuadorian household spending.
The stats show that Ecuadorians spend 24.4 percent of their income on food purchases, 14.6 percent on transportation, 7.5 percent on health expenses, and 4.4 percent on education.
Less than 60 percent of households have any savings. For those who do manage to put away money each month, the average monthly household savings is about $83.
Jaime Gallegos, an economist, finds this year’s stats worrying.
“The government needs to raise sales taxes and income taxes, to reign in consumerism. The dollarized economy is at risk, if they don’t,” Gallegos said.
He added that the indiscriminate credit granting is another problem in the country’s economy.
The new data shows that 41.1 percent of households spend more than they make in a month and carry debt. Only 58.8 percent make more than that spend in a month, and 0.1 percent of households have a perfectly balanced monthly budget.
The average monthly household income is $893.
“There is a disorganized management of income in households,” says the economist Hugo Villacrés. There is no culture for saving, or of having good financial management, which he says should be taught in high schools.
“Too many rely on plastic money, but will also buy consumer good daily at the corner store instead of buying large quantities in bulk at stores where the price in the long run would be better.”
Gallegos says that households would be encouraged to save if the passive interest rates on savings accounts, checking accounts, or term investments were at all similar to the active interest rates for loans, which are around 15 percent.
The full study, the Enighur (National Survey of income and spending in rural and urban homes) covers the period of April 2011 to March 2012. It can be read in Spanish here (PDF).
