Ecuador: Transformations and adjustment put to the test by a decade of shocks (2015–2025)

Between 2015 and 2025, a series of factors destabilized Ecuador’s economic, social, and political model: declining oil rents; another sovereign default; political instability following the end of the Correaera; rising crime; and a series of exogenous shocks, including natural disasters, the pandemic, and severe weather events. These induced profound transformations in the economic model, slowed the pace of growth, and aggravated fiscal and financial vulnerabilities.
The consequences were still being felt in 2023, with a deterioration in budget balances and pressure on foreign exchange (FX) reserves, then in 2024, when the economy experienced a 2% recession. Since early 2025, however, the economy has shown signs of stabilizing. Economic activity is benefiting from a more favorable macroeconomic and political environment, and the growth rate is expected to have reached between 3.4% and 3.8%. The state of public accounts, meanwhile, confirms the consolidation trajectory observed since 2016. The government has taken strong measures to improve tax revenues and control spending, which should reassure donors and private investors. As a result, Ecuador was able to issue debt on international capital market in early 2026 for the first time since 2020. Finally, the country’s FX reserves have reached a historic high, driven by the strong performance of the non-oil export sector. The Ecuadorian economy thus seems to have absorbed the impacts of the crises of 2015–2025, and its macroeconomic buffers were strengthened in 2025.