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By Alexandra Valencia
QUITO, Oct 3 (Reuters) - 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 added.
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)