flag Ecuador Ecuador: Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Ecuador is the eighth largest economy in Latin America. However, the country is highly dependent on oil production and vulnerable to global oil prices. According to the IMF, GDP grew by an estimated 2.8% in 2021, mainly supported by private consumption and gross fixed investment. In 2022, GDP is expected to pick up to 3.5% before slowing down to 2.5% in 2023.

Although still in deficit, budget balance improved in 2021, reaching -1.9%. After years of deficit, budget balance is expected to record a surplus of 0.2% in 2022, a rate which should increase to 1.4% in 2023. Inflation stood at 0.0% in 2021; however, the rate should increase to 2.1% in 2022 and 1.8% in 2023. During that period, Ecuador's very low inflation is expected to allow a recovery in private consumption. In 2021, public debt stood at an estimated 61%. However, the government has committed to reducing public debt - which is projected to reach 59.9% in 2022 and 57.9% in 2023 - in exchange for the IMF financial support of USD 4.2 billion over three years under an extended credit facility obtained in 2019. The austerity measures put in place to reduce public debt include cutting back investments, the obligation to use tenders for public contracts, the phase-out of public jobs through mergers of state-owned entities, and the removal of subsidies on premium gasoline. In 2021, the government continued implementing measures in response to the economic crisis resulting from the COVID-19 pandemic, which included exceptional cash transfers to poor families, distribution of food baskets, temporary relaxation of eligibility criteria for unemployment insurance, and additional spending on health. These measures were supplemented with a deferral of payroll contributions, tuition, health insurance, utilities, and housing support as well as temporary price controls for basic food items. To address liquidity shortage in the financial system, the government reduced the banks’ contribution rate to the Liquidity Fund by three percentage points of deposits, which helped re-balance internal liquidity while the demand for cash also slowed gradually. Overall, the economy has been showing significant signs of recovery thanks to the measures adopted by the government in light of the pandemic.

The unemployment rate decreased to 4.5% in 2021, and it should further decrease to 4.2% in 2022 and 4% in 2023. However, nearly 35% of the population has "non-appropriate", part-time or unpaid jobs, and with the informal sector accounting for 45% of employment, many households do not receive the minimum wage and full social benefits. The main challenges the country faces are the diversification of its economy and the training of a more qualified labour force. Moreover, the Ecuadorian economy has to deal with insufficient private investment, corruption in the public sector, poor management of its oil exploitation and the recent climatic disasters.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 108.1198.81104.48109.98114.08
GDP (Constant Prices, Annual % Change) 0.0-7.8e2.83.52.5
GDP per Capita (USD) 6,2615,6435,8846,1086,248
General Government Balance (in % of GDP) -2.9-4.4-1.90.21.4
General Government Gross Debt (in % of GDP) 51.461.2e61.059.957.9
Inflation Rate (%) 0.3-0.30.13.22.4
Current Account (billions USD) -0.062.471.791.912.22
Current Account (in % of GDP) -0.12.51.71.71.9

Source: IMF – World Economic Outlook Database - October 2021.

Note: (e) Estimated Data


 
Monetary Indicators 20162017201820192020
American Dollar (USD) - Average Annual Exchange Rate For 1 GBP 1.351.291.331.251.28

Source: World Bank - Latest available data.

 

Main Sectors of Industry

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 29.7 17.2 53.0
Value Added (in % of GDP) 9.8 32.0 52.6
Value Added (Annual % Change) 0.4 -8.2 -7.4

Source: World Bank - Latest available data.

 
Socio-Demographic Indicators 20212022 (e)2023 (e)
Unemployment Rate (%) 4.64.24.1

Source: IMF – World Economic Outlook Database - Latest available data

 

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The Active Population in Figures

201820192020
Labour Force 8,364,8698,519,4108,019,239

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 71.97%71.03%70.96%
Men activity rate 84.44%83.91%83.69%
Women activity rate 59.51%58.16%58.23%

Source: International Labour Organization, ILOSTAT database

 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
52,4/100
World Rank:
149
Regional Rank:
27

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
5.42/10
World Rank:
67/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Country Risk

See the country risk analysis provided by Coface.

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Partly Free
Political Freedom:
3/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
96/180

Source: World Press Freedom Index, Reporters Without Borders

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Sources of General Economic Information

Main Online Newspapers and Portals
El Universo (only in Spanish)
Extra (only in Spanish)
Expresso (only in Spanish)
La Hora (only in Spanish)
El Comercio (only in Spanish)
La República (only in Spanish)
Vistazo (only in Spanish)
El Telégrafo (only in Spanish)
Useful Resources
Ministry of Economy and Finance (in Spanish)
Ministry of Foreign Affairs and Human Mobility (in Spanish)
Ministry of Economic and Social Inclusion (in Spanish)
Ministry of Production, Foreign Trade, Investments and Fisheries (in Spanish)
Ministry of Transport and Public Works (in Spanish)
Ministry of Human Development and Housing (in Spanish)
Ministry of Agriculture and Livestock (in Spanish)
Ministry of Energy and Non-Renewable Natural Resources (in Spanish)
Ministry of Tourism (in Spanish)
Ministry of Government (in Spanish)
Central Bank of Ecuador
 
 

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Latest Update: May 2022

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