(Adds central bank quote, context)
By Alexandra Valencia
QUITO Oct 3 Ecuador's economy shrank 2.2
percent in the second quarter of 2016 from the same period the
previous year, due to a stronger dollar that hit non-oil
exports, the OPEC country's central bank said on Monday.
Ecuador's economy is dollarized and an appreciation of the
U.S. dollar this year has hit the Andean country's exports of
bananas, cocoa, flowers and tuna.
But the central bank said an increase in bank deposits,
expectations of stronger consumption and a small recovery in oil
prices would boost the economy of crude-producing Ecuador in the
second half of the year.
"There are very positive expectations for the third and
fourth quarter," central bank President Diego Martinez told
reporters in Quito, adding the bank may maintain its forecast of
1.7 percent economic expansion this year.
The oil sector grew 7.4 percent in the second quarter
year-on-year, boosted by the ramp-up of new projects, Martinez
Ecuador suffered a 7.8-magnitude earthquake that killed more
than 660 people in April. Authorities had said that would likely
knock 0.7 percent off gross domestic product this year, as
$3.344 billion would be required for reconstruction.
(Reporting by Alexandra Valencia; Writing by Alexandra Ulmer;
Editing by Lisa Shumaker)