Ecuador Economic Forecast

Ecuador Economic Outlook

June 14, 2022

The economy seemed to slow in Q1. On average, economic activity grew at a weaker annual pace than in 2021. The oil sector contracted due to natural disasters and lack of prior investment. More positively, the agricultural, construction and services sectors grew strongly. Turning to Q2, the oil sector is likely recovering, boosting growth. Meanwhile, near decade-high oil prices are providing relief to the external and fiscal balances. This has allowed the government to introduce a new cash transfer program and housing subsidies, supporting private consumption alongside its existing fuel subsidy program. That said, such measures will hurt public finances, which could pose a problem for the lending agreement reached with the IMF in May. In politics, the president and the legislature remain at loggerheads due to conflicts over policies relating to the judiciary, labor market and investment.

Ecuador Economic Growth

This year, growth appears unlikely to bring GDP back to its pre-pandemic levels. Rising inflation and a weak labor market will dent private spending in spite of government subsidies. That said, high energy prices will fortify the country’s external and fiscal balances. Key factors to watch include commodity prices and volatile weather conditions. FocusEconomics panelists project GDP to expand 2.8% in 2022, which is down 0.1 percentage points from last month’s forecast. In 2023, the panel sees GDP growth moderating to 2.3%.

Ecuador Economy Data

2015 2016 2017 2018 2019
Population (million)16.316.516.817.017.3
GDP per capita (USD)6,0996,0466,2176,3196,222
GDP (USD bn)99.399.9104108107
Economic Growth (GDP, annual variation in %)0.1-1.22.41.30.1
Consumption (annual variation in %)0.3-2.03.62.40.7
Investment (annual variation in %)-6.2-8.95.32.0-3.4
Industrial Production (annual variation in %)-  -  -  -  -  
Unemployment Rate4.35.44.44.1-  
Fiscal Balance (% of GDP)-6.1-8.2-4.5-3.1-2.8
Public Debt (% of GDP)33.038.244.646.050.2
Inflation Rate (CPI, annual variation in %, eop)3.41.1-0.20.3-0.1
Inflation Rate (CPI, annual variation in %)4.01.70.4-0.20.3
Inflation (PPI, annual variation in %)-  -  -  -  -  
Benchmark Interest Rate (%)5.145.124.955.626.22
Current Account (% of GDP)-2.21.1-0.1-1.2-0.1
Current Account Balance (USD bn)-2.21.1-0.2-1.3-0.1
Trade Balance (USD billion)-3.20.5-0.9-1.5-0.2
Exports (USD billion)18.316.819.121.622.3
Imports (USD billion)21.516.320.023.222.6
Exports (annual variation in %)-28.7-8.413.813.13.2
Imports (annual variation in %)-22.4-24.122.615.8-2.6
International Reserves (USD)2.54.32.52.73.4
External Debt (% of GDP)27.634.238.540.948.7

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Ecuador Facts

Value Change Date
Exchange Rate25,0000.0 %Dec 31

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