Ecuador: Economic Outline

Economic Indicators

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 figures from the National Bank, in 2023, GDP growth stood at 2.4%, down from the 6.2% rate recorded one year earlier. The growth was propelled by the vigor of government expenditure, up by 3.7%; exports, rising by 2.3%; household consumption, increasing by 1.4%; and gross fixed capital formation (GFCF), edging up by 0.5%. Towards the end of 2023, the economy has significantly slowed down due to rising insecurity caused by organized crime, disruptions in oil production, climate-related events, and political uncertainty. The IMF projects growth at 1.8% this year and 2% in 2025.

Concerning public finances, the latest estimates from the Ministry of Finance pointed to a fiscal deficit exceeding USD 5 billion in 2023, reaching around 5% of GDP. The IMF estimated the debt-to-GDP ratio at 55.5% in the same year, with a projected decrease over the forecast horizon (to 52.6% by 2025). The new government, which commenced its 18-month term in November 2023, confronts notable liquidity constraints and a substantial financing shortfall, projected to expand in the absence of structural fiscal reforms in the upcoming years. Ecuador's 2024 budget aims to reduce the fiscal deficit, notwithstanding the pressure to increase spending on security, as the government endeavored to improve its prospects for a deal with the International Monetary Fund. IMF staff and Ecuadorian authorities have reached a staff-level agreement on policies to support a 48-month arrangement under the EFF, totaling approximately USD 4 billion. Pending approval from the IMF Management and Executive Board, this arrangement would bolster Ecuador's economic policies over the next four years. Meanwhile, annual inflation closed December 2023 at 1.35%, according to the National Institute of Statistics and Census (INEC). As per the World Bank, the country must regain capital market confidence and establish fiscal reserves to confront global and climate changes. The public sector must reduce reliance on oil, facing well maturity and a referendum to halt Yasuni National Park operations. Moreover, unlocking growth potential is vital to create quality jobs and resume poverty reduction efforts. This demands political consensus to overcome barriers hindering formal job creation, private investment, and export diversification, including market intervention, limited competition, trade integration, and labor regulations.

The country's unemployment rate decreased to an estimated 3.6% in 2023, from 3.8% one year earlier (World Bank). 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. Extreme poverty also decreased by 2.3 percentage points since 2021, reaching 8.2% in 2022 (latest data available).

Monetary Indicators	2020	2021	2022	2023	2024
American Dollar (USD) - Average Annual Exchange Rate For 1 GBP	1.28	1.38	1.23	1.24	1.28

Source: World Bank - Latest available data.

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Latest Update: October 2025