April 26 (Reuters) - Ecuador's socialist President Rafael Correa is expected to win a second term easily in Sunday's election but faces tougher times as low oil prices threaten his spending on the poor.
WHY IS ECUADOR HOLDING GENERAL ELECTIONS NOW?
Correa had nearly two years left of his current term but a new constitution approved last year permits him to start again from scratch. The new rules allow presidents two consecutive terms in office and, if he wins on Sunday, Correa will hope to run again in four years.
The elections for almost all public officials in the Andean nation will help Correa consolidate control over the legislature and local governments in a volatile country with a history of ousting presidents.
WHAT CAN WE EXPECT OF CORREA IF HE WINS A SECOND TERM?
Correa will do his best to keep up spending on social programs, although the slowing economy could limit him and harm his popularity.
He will also try to maintain a tough stance with foreign investors, pushing for more state control of the mining and oil industries and renegotiating Ecuador's debt.
His style has won support from many Ecuadoreans tired of weak governments but has also scared away foreign investment at a time when state finances are under pressure.
Correa has recently shown some moderation by dealing with the business elite and debt holders, but some analysts doubt his pragmatism will last too long and expect him to stick to his winning formula of confrontation.
WHAT CHALLENGES DOES THE FORMER ECONOMICS PROFESSOR FACE?
The global economic slowdown presents a serious risk to Correa, who relies on oil revenues to keep his promises to spend on health, housing, pensions and education.
A decision to default on foreign debt has limited his options to finance a growing fiscal deficit with new credits.
If oil prices remain low for too long and tax revenues fall due to a weakening economy, Correa could be forced to drop the U.S. dollar as Ecuador's currency.
He needs to avoid disappointing Ecuador's notoriously volatile electorate, which ousted three presidents in less than a decade before Correa came to power in 2007.
WILL A WEAKER ECONOMY FORCE CORREA TO MODERATE POLICIES?
Faced with lower oil prices, he has halved public investment this year and promises to inject liquidity into private banks worried by dwindling deposits and scarce international credits.
He has offered a plan to buy back about $3 billion in defaulted debt in a proposal less harsh than investors had expected. Analysts says the softer approach shows Correa's growing concerns over international lawsuits and the need to reopen credit lines vital to financing the budget shortfall.
COULD THERE BE A SURPRISE IN SUNDAY'S ELECTION?
Not likely. All polls show the charismatic leader ahead by a huge margin. He has campaigned hard, outgunning the opposition in a media campaign helped by the government takeover of some television stations last year.
Correa's election rivals are banana mogul Alvaro Noboa and former President Lucio Gutierrez. They represent old political parties blamed by many voters for the country's inequalities.
A strong showing by allies of Gutierrez and Noboa could still hurt Correa, preventing him from securing an outright majority in the 124-member National Assembly. (Reporting by Alonso Soto and Frank Jack Daniel; Editing by Kieran Murray and John O'Callaghan)