Ecuador’s Finance Minister presented a pro forma budget to the National Assembly for the second half of 2013. His budget for the rest of the year is $32.3 billion.

A $5 billion projected deficit would be covered, in part, by a new $1.4 billion investment arriving from China next month, he calculated. The state is also analyzing borrowing up to $200 million from the social security system, the IESS.

Finance minister Fausto Herrera says the loan from the Chinese will be negotiated to be repaid with anticipated oil sales.

Last February, China already disbursed $1.4 billion, which went towards flood control and hydroelectric plant construction of the Coca-Codo Sinclair project (hoped to produce 1500 megawatts of electricity by 2016).

The minister said Ecuador will not be issuing bonds to finance its budget, but may return to the capital markets in 2014.

The pro forma budget is 7.8% higher than the prorogued 2012 budget of $26.1 billion. The minister expects the economy to grow 4.5 percent this year, and for the GDP to be $90.326 billion.

One of Ecuador’s financial bottlenecks is the cost of its internal subsidies: currently the government subsidizes fuels such as diesel, gasoline and cooking gas to the tune of $4.5 billion. All these products are imported at international prices and sold internally for below market value.

Ecuador’s foreign debt is at $4.3 billion -- about $3.8 billion of that is owed to China.

The pro forma budget will be analyzed by the National Assembly for 30 days. The sizeable deficit may give the Economic committee some pause. Assembly member Patricio Donoso, from the opposition, says they will question why the budget was based on a price of $84.9 per barrel of oil.