Ecuador Economic Outlook
Oil-dependent economy:
Ecuador's economy is largely dependent on oil exports, which account for a significant portion of government revenues. This reliance makes the country vulnerable to fluctuations in global oil prices, which have historically caused economic volatility. In recent years, economic growth has been sluggish, constrained by external debt, low investment, and slow progress on economic diversification. The COVID-19 pandemic further exacerbated Ecuador’s financial difficulties, leading to a severe recession and increasing poverty levels. While the country has since experienced a moderate recovery, structural weaknesses remain.
Dollarization:Ecuador has used the U.S. dollar as its official currency since 2000, which has helped control inflation but limited monetary policy flexibility. While dollarization has ensured price stability, it has also made the economy less competitive in regional trade, as Ecuador cannot devalue its currency to boost exports. Additionally, reliance on the U.S. dollar means the country must maintain strong foreign exchange reserves, which can be challenging during periods of low oil revenues or external shocks. This constraint has made fiscal policy Ecuador’s primary tool for managing economic fluctuations, increasing the importance of sound public finances.
Debt concerns:The government has faced fiscal deficits and rising debt, leading to agreements with the International Monetary Fund (IMF) to implement economic reforms. However, austerity measures have faced public opposition, contributing to political instability. Successive administrations have struggled to balance fiscal discipline with the need for social spending, particularly in education, healthcare, and infrastructure. High debt levels have limited the government’s ability to invest in long-term growth initiatives, making economic sustainability a pressing concern.
Ecuador’s economic outlook:Ecuador’s economic future depends on diversifying its economy, improving governance, and attracting investment in sectors such as agriculture, mining, and tourism. While oil prices remain a key determinant of short-term growth, structural reforms will be essential for long-term stability. Efforts to strengthen the business climate, reduce corruption, and enhance infrastructure will be crucial to attracting private investment. The government must also navigate social and political tensions carefully, as unpopular economic measures could lead to unrest and further instability. If managed effectively, Ecuador has the potential to achieve stable growth and reduce its dependence on oil revenues over the next decade.
Ecuador's Macroeconomic Analysis:
Nominal GDP of USD 124.7 billion in 2024.
Nominal GDP of USD 121.1 billion in 2023.
Nominal GDP of USD 121.1 billion in 2023.
GDP per capita of USD 6,793 compared to the global average of USD 10,589.
GDP per capita of USD 6,793 compared to the global average of USD 10,589.
GDP per capita of USD 6,939 compared to the global average of USD 10,589.
Average real GDP growth of 1.5% over the last decade.
Average real GDP growth of 2.4% over the last decade.
Average real GDP growth of 2.4% over the last decade.
Sector Analysis
In 2022, services accounted for 59.7% of overall GDP, manufacturing 12.4%, other industrial activity 20.2%, and agriculture 7.7%. Looking at GDP by expenditure, private consumption accounted for 64.3% of GDP in 2023, government consumption 13.9%, fixed investment 21.4%, and net exports 0.4%.International trade
In 2022, manufactured products made up 5.2% of total merchandise exports, mineral fuels 35.5%, food 46.4%, ores and metals 6.6% and agricultural raw materials 3.6%, with other categories accounting for 2.7% of the total. In the same period, manufactured products made up 59.9% of total merchandise imports, mineral fuels 24.3%, food 12.6%, ores and metals 1.2% and agricultural raw materials 0.8%, with other goods accounting for 1.2% of the total. Total exports were worth USD 34.70 billion in 2024, while total imports were USD 27.90 billion.Main Economic Indicators
Economic growthThe economy recorded average annual growth of 2.4% in the decade to 2023. To read more about GDP growth in Ecuador, go to our dedicated page.
Fiscal policy
Ecuador's fiscal deficit averaged 5.3% of GDP in the decade to 2023. Find out more on our dedicated page.
Unemployment
The unemployment rate averaged 4.5% in the decade to 2024. For more information on Ecuador's unemployment click here.
Inflation
Inflation averaged 1.5% in the decade to 2024. Go to our Ecuador inflation page for extra insight.
Monetary Policy
Ecuador's monetary policy rate ended 2024 at 10.43%, up from 8.19% a decade earlier. See our Ecuador monetary policy page for additional details.
Economic situation in Ecuador
GDP contracted in Q4 for the fourth consecutive quarter, albeit less sharply than in Q3: Gang violence, the start of the closure of the oil wells in Block 43-ITT, political uncertainty ahead of the early 2025 presidential elections, and the most severe drought in the last 60 years kept the economy in a dire situation. Turning to Q1 2025, our panel expects the economy to have remained subdued. Oil production fell at the sharpest annual rate since early 2022 in Q1, hinting at prolonged weakness in the external sector. Still, domestically, credit to the private sector gained momentum and inflation eased. In Q2, the economy should be strengthening: Consumer confidence, credit growth and oil output all improved in April from Q1. In other news, in June, Ecuador's National Assembly granted the government new legal powers to confront armed groups in a bid to stop gang violence and drug trafficking.Ecuador Economic Forecasts
Projections out to 2034.39 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 21 expert analysts.
Want to get insight on the economic outlook for Ecuador in the coming years? FocusEconomics collects projections out to 2034 on 39 economic indicators for Ecuador from a panel of 21 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Ecuador economy. To download a sample report on the Ecuador's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.