Fixed Investment in Ecuador
Ecuador's economy recorded an average growth rate of -1.1% in fixed investment over the decade to 2022, below the 0.9% average for Latin America. In 2022, fixed investment growth was 2.5%. For more investment information, visit our dedicated page.
Ecuador Investment Chart
Note: This chart displays Investment (annual variation in %) for Ecuador from 2021 to 2020.
Source: Macrobond.
Ecuador Investment Data
2019 | 2020 | 2021 | 2022 | 2023 | |
---|---|---|---|---|---|
Fixed Investment (ann. var. %) | -2.3 | -21.8 | 13.7 | 9.2 | 0.2 |
Economy shrinks at a more moderate pace in Q3
GDP contracts for the third consecutive quarter: Seasonally adjusted GDP contracted 1.5% in annual terms in Q3, improving from Q2’s 4.0% fall. Still, the result marked the third consecutive quarter of contraction, suggesting that the economy remains weak. On a quarter-on-quarter basis, seasonally adjusted GDP dropped 0.2% in Q3, following the previous quarter's 1.1% decrease and marking the softest contraction since Q4 2023.
Domestic demand leads the improvement: Looking at the details of the release, domestic demand was the main driver of the improvement. Household spending bounced back, expanding 2.9% year on year (Q2: -1.8% yoy s.a.), bolstered by accelerating remittances inflows and lower inflation. Moreover, fixed investment fell at a more moderate rate of 6.2% (Q2: -7.9% yoy s.a.), and government spending declined at a softer pace of 1.0% (Q2: -1.5% yoy s.a.). On the external front, exports of goods and services contracted by 5.1% in Q3 (Q2: +1.6% yoy s.a.), hampered by declining oil production amid the Block 43 oil field shutdown, and marking the worst result since Q1 2021. Meanwhile, imports of goods and services growth slowed to 0.3% in Q3 (Q2: +5.4% yoy s.a.).
GDP outlook: Our panelists have penciled in a rebound for Q4; declining inflation and lending rates should have supported household budgets, and therefore private spending in turn. In 2025, our Consensus is for the economy to return to growth following 2024’s decline due to rebounds in all domestic demand components. That said, growth will remain below its pre-pandemic decade average of 3.6% as exports are expected to lose some steam this year, hindered by U.S. import tariffs.
Panelist insight: Oxford Economics’ Mauricio Monge commented on the 2025 outlook: “Private demand is expected to recover […] mainly due to base effects, as market conditions for consumers and businesses will remain tough. Yet, risks are tilted to the downside. A worsening security situation and an extension of the ongoing electricity shortages will cut growth next year.”
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Ecuadorian investment projections for the next ten years from a panel of 7 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. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable investment forecast available for Ecuadorian investment.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Ecuadorian investment projections.
Want to get access to the full dataset of Ecuadorian investment forecasts? Send an email to info@focus-economics.com.
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