Economy of Ecuador

Economy of Ecuador
World Trade Center Guayaquil
CurrencyUnited States dollar (USD)
calendar year
Trade organizations
Andean Community of Nations, WTO, Unasur, ALADI, Bolivarian Alliance for the Americas, Mercosur (associate)
  • Increase $108.398 billion (nominal, 2018)[1]
  • Increase $200.188 billion (PPP, 2018)[1]
GDP rank63rd (PPP, 2012 est.)
GDP growth
  • −1.2% (2016) 2.4% (2017)
  • 1.4% (2018e) 0.0% (2019f)[2]
GDP per capita
  • Increase $6,368 (nominal, 2018)[1]
  • Increase $11,760 (PPP, 2018)[1]
GDP by sector
Agriculture: 6.7%
Industry: 32.9%
Services: 60.4% (2017 est.)[3]
−0.224% (2018)[1]
Population below poverty line
21.5% (December 2017 est.)[3]
44.7 (2017)[4]
Labor force
7.6 million (December 2016)[5]
Labor force by occupation
agriculture: 26.1%
industry: 18.4%
services: 55.5% (2017 est.)[3]
Unemployment3.5% (2018)[6]
Main industries
petroleum, food processing, textiles, wood products, chemicals
114th (2017)[7]
ExportsIncrease $19.3 billion (2017)[8]
Export goods
petroleum, bananas, cut flowers, shrimp, cacao, coffee, wood, fish
Main export partners
 United States 31%
 Vietnam 7.6%
 Chile 6.9%
 Panama 4.8%
 Russia 4.7% (2017)[8]
Imports$19.3 billion (2017)[8]
Import goods
industrial materials, fuels and lubricants, nondurable consumer goods
Main import partners
 United States 19%
 China 19%
 Colombia 7.8%
 Brazil 4.5%
 Panama 4.4% (2017)[8]
FDI stock
Increase $17.25 billion (December 31, 2017 est.)
Increase$39.29 billion (December 31, 2017 est.)
Public finances
Negative increase 44.6% of GDP (December 31, 2017)[9]
Revenues$33.43 billion (2017 est.)[3]
Expenses$38.08 billion (2017 est.)[3]
Economic aid$209.5 million (2005)
Foreign reserves
Decrease $2.169 billion (2017)[10]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

The economy of Ecuador is the eighth largest in Latin America and the 69th largest in the world by total GDP.[11] Ecuador’s economy is based on the export of oil, bananas, shrimp, gold, other primary agricultural products and money transfers from Ecuadorian emigrants employed abroad.[12] In 2017, remittances constituted 2.7% of country's GDP.[13] The total trade amounted to 42% of the Ecuador’s GDP in 2017.[14] The country is substantially dependent on its petroleum resources. In 2017, oil accounted for about one-third of public-sector revenue and 32% of export earnings.[15][16] Ecuador is one of OPEC's smallest members[17] and produced about 531,300 barrels per day of petroleum in 2017.[15][18] It is the world's largest exporter of bananas ($3.38 billion in 2017) and a major exporter of shrimp ($3.06 billion in 2017).[11] Exports of non-traditional products such as cut flowers ($846 million in 2017) and canned fish ($1.18 billion in 2017) have grown in recent years.[11] In the past, Ecuador’s economy depended largely on primary industries like agriculture, petroleum, and aquaculture. As a result of shifts in global market trends and development of technology have led to the economic development of other sectors like textile, processed food, metallurgy and the service sectors.[12] Between 2006 and 2014, GDP growth averaged 4.3%, driven by high oil prices and external financing.[19] From 2015 until 2018 GDP growth averaged just 0.6%.[20] Ecuador's president, Lenín Moreno, has launched a radical transformation of Ecuador’s economy since taking office in May 2017. The aim is to increase the private sector’s weight, in particular the oil industry.[21][22] The International Monetary Fund approved an agreement with Ecuador in March 2019.[20] This arrangement would provide support ($10 billion) for the Ecuadorian government’s economic policies over three years (2018-2021 Prosperity Plan).[20][23]

Economy 1998–2006[edit]

Deteriorating economic performance in 1997–98 culminated in a severe financial crisis in 1999. The crisis was precipitated by a number of external shocks, including the El Niño weather phenomenon in 1997, a sharp drop in global oil prices in 1997–98, and international emerging market instability in 1997–98. These factors highlighted the Government of Ecuador's unsustainable economic policy mix of large fiscal deficits and expansionary money policy and resulted in a 7.3% contraction of GDP, annual year-on-year inflation of 52.2%, and a 65% devaluation of the national currency in 1999.

On January 9, 2000, the administration of President Jamil Mahuad announced its intention to adopt the U.S. dollar as the official currency of Ecuador to address the ongoing economic crisis. Subsequent protest led to the 2000 Ecuadorean coup d'état which saw Mahuad's removal from office and the elevation of Vice President Gustavo Noboa to the presidency.

The Noboa government confirmed its commitment to convert to the dollar as the centerpiece of its economic recovery strategy, successfully completing the transition from sucres to dollars in 2001. Following the completion of a one-year stand-by program with the International Monetary Fund (IMF) in December 2001, Ecuador successfully negotiated a new $205 million stand-by agreement with the IMF in March 2003.

Buoyed by higher oil prices, the Ecuadorian economy experienced a modest recovery in 2000–01, with GDP rising 2.3% in 2000 and 5.4% in 2001. GDP growth leveled off to 3.3% in 2002. Although final figures are not yet available, it is expected to fall further, to about 1.7%, for 2003. GDP growth is estimated to recover to over 4% in 2004, due largely to expanded oil exports. Inflation fell from an annual rate of 96.1% in 2000 to an annual rate of 37.7% in 2001; 12.6% for 2002. Despite recent gains, 40% of the population lives below the poverty line, more than double the rate five years ago.[24]

The completion of the second Transandean Oil Pipeline (OCP in Spanish) in 2003 enabled Ecuador to expand oil exports. The OCP will double Ecuador's oil transport capacity.

Current infrastructure development[edit]

The industrial sector has had enormous difficulty to emerge significantly. The industrial sector's main problem is the deficit of energy,[25] which the current government has tackled with the improvement of performance on existing hydro plants, and the creation of new ones. Such projects included negotiation of the Coca-Codo hydroplant.[25][26] Incentives of financing, tributary incentives, tariffs, and others will be implemented, that is intended to benefit areas of tourism, foods process, renewable and alternative energies, bioenergies, pharmaceutical and chemical products, biochemical and environmental biomedecine, services, automotive metallurgical industry, footwear, and automotive parts and pieces, among others.[25] A 500 kV transmission line increases national grid strength and electricity trade with Peru and Colombia.[27]

Economy 2007–11[edit]

Graphical depiction of Ecuador's product exports in 28 color-coded categories.

Ecuador's economy is the eighth largest in Latin America and experienced an average growth of 4.6% per year between 2000 and 2006.[28] In January 2009, the Central Bank of Ecuador (BCE) put the 2010 growth forecast at 6.88%.[29] GDP doubled between 1999 and 2007, reaching 65,490 million dollars according to BCE.[30] Inflation rate up to January 2008 was located about 1.14%, the highest recorded in the last year, according to Government.[31][32] The monthly unemployment rate remained at about 6 and 8 percent from December 2007 until September 2008, however, it went up to about 9 percent in October and dropped again in November 2008 to 8 percent.[33] An estimated 9 million Ecuadorians have an economic occupation and about 1.01 million inhabitants are in unemployment condition.[34] In 1998, 10% of the richest population had 42.5% of income, while 10% of the poor had only 0.6% of income.[35] The rates of poverty were higher for populations of indigenous, afro-descendents, and rural sectors.[36] During the same year, 7.6% of health spending went to the 20% of the poor, while 20% of the rich population received 38.1% of this expenditure. The extreme poverty rate has declined significantly between 1999 and 2010.[37] In 2001 it was estimated at 40% of the population, while by 2011 the figure dropped to 17.4% of the total population.[38] This is explained largely by emigration and economic stability achieved after adopting the U.S dollar as official means of transaction .[39] Poverty rates were higher for indigenous peoples, Afro-descendants and rural areas, reaching 44% of the Native ancestry population.

Oil accounts for 40% of exports and contributes to maintaining a positive trade balance.[40] Since the late '60s, the exploitation of oil increased production and reserves are estimated at 4.036 million barrels[41]

The overall trade balance for August 2012 was a surplus of almost 390 million dollars for the first six months of 2012, a huge figure compared with that of 2007, which reached only $5.7 million; the surplus had risen by about 425 million compared to 2006.[42] This circumstance was due to the fact that imports grew faster than exports.[43] The oil trade balance positive had revenues of $3.295 million in 2008, while non-oil was negative amounting to 2.842 million dollars.[citation needed] The trade balance with the United States, Chile, the European Union, Bolivia, Peru, Brazil and Mexico is positive.[citation needed] The trade balance with Argentina, Colombia and Asia is negative.[44]

In the agricultural sector, Ecuador is a major exporter of bananas (first place worldwide in production and export), flowers, and the eighth largest producer of cocoa.[citation needed] It is also significant in shrimp production, sugar cane, rice, cotton, corn, palm and coffee.[citation needed] The country's vast resources include large amounts of timber across the country, like eucalyptus and mangroves.[45] Pines and cedars are planted in the region of the Sierra, walnuts and rosemary, and balsa wood, on Guayas River Basin.[citation needed]

The industry is concentrated mainly in Guayaquil, the largest industrial center, and in Quito, where in recent years the industry has grown considerably. This city is also the largest business center of the country.[46] Industrial production is directed primarily to the domestic market.[citation needed] Despite this, there is limited export of products produced or processed industrially.[citation needed] These include canned foods, liquor, jewelry, furniture, and more.[citation needed] Minor industrial activity is also concentrated in Cuenca.[47]

Ecuador has negotiated bilateral treaties with other countries, besides belonging to the Andean Community of Nations,[48] and an associate member of Mercosur.[49] It also belongs to the World Trade Organization (WTO), in addition to the Inter-American Development Bank (IDB), World Bank, International Monetary Fund (IMF), Corporacion Andina de Fomento (CAF) and other multilateral agencies.[50][51][52] In April 2007, Ecuador paid off its debt to the IMF thus ending an era of interventionism of the Agency in the country.[53] The public finance of Ecuador consists of the Central Bank of Ecuador (BCE), the National Development Bank (BNF), the State Bank, the National Finance Corporation, the Ecuadorian Housing Bank (BEV) and the Ecuadorian Educational Loans and Grants.[54]

Between 2006 and 2009, the government increased spending on social welfare and education from 2.6% to 5.2% of its GDP.[55] Starting in 2007, when its economy was surpassed by the economic crisis, Ecuador was subject to a number of economic policy reforms by the government that have helped steer the Ecuadorian economy to a sustained, substantial, and focused achievement of financial stability and consistent social policy.[55][vague] Such policies were expansionary fiscal policies, of access to housing finance, stimulus packs, and limiting the amount of money reserves banks could keep abroad.[55] The Ecuadorian government has made huge investments in education and infrastructure throughout the nation, which have improved the lives of the poor.[56]

On December 12, 2008 President Rafael Correa announced that Ecuador would not pay $30.6m in interest to lenders of a $510m loan, claiming that they were monsters.[57] In addition it claimed that $3.8bn in foreign debt negotiated by previous administrations was illegitimate because it was authorized without executive decree.[57] At the time of the announcement, the country had $5.65bn in cash reserves.[57]


The following table shows the main economic indicators in 1980–2017. Inflation below 5% is in green.[58]

Year GDP
(in Bil. US$ PPP)
GDP per capita
(in US$ PPP)
GDP growth
Inflation rate
(in Percent)
(in Percent)
Government debt
(in % of GDP)
1980 26.1 3,246 Increase4.9 % Negative increase13.0 % n/a n/a
1981 Increase29.6 Increase3,584 Increase3.9 % Negative increase16.4 % n/a n/a
1982 Increase31.8 Increase3,746 Increase1.2 % Negative increase16.3 % n/a n/a
1983 Decrease32.1 Decrease3,681 Decrease−2.8 % Negative increase48.4 % n/a n/a
1984 Increase34.6 Increase3,867 Increase4.2 % Negative increase31.2 % n/a n/a
1985 Increase37.3 Increase4,058 Increase4.4 % Negative increase28.0 % n/a n/a
1986 Increase39.3 Increase4,160 Increase3.1 % Negative increase23.0 % n/a n/a
1987 Decrease37.9 Decrease3,911 Decrease−6.0 % Negative increase29.5 % n/a n/a
1988 Increase43.3 Increase4,359 Increase10,5 Negative increase58.2 % 7.0 % n/a
1989 Increase45.1 Increase4,432 Increase0.3 % Negative increase76.6 % Negative increase7.9 % n/a
1990 Increase48.2 Increase4,625 Increase3.0 % Negative increase48.5 % Positive decrease6.1 % n/a
1991 Increase52.4 Increase4,910 Increase5.1 % Negative increase48.8 % Negative increase8.5 % n/a
1992 Increase55.5 Increase5,088 Increase3.6 % Negative increase54.3 % Negative increase8.9 % n/a
1993 Increase58.0 Increase5,200 Increase2.0 % Negative increase45.0 % Positive decrease8.3 % n/a
1994 Increase61.7 Increase5,425 Increase4.3 % Negative increase27.4 % Positive decrease5.7 % n/a
1995 Increase64.4 Increase5,556 Increase2.3 % Negative increase22.9 % Positive decrease5.4 % n/a
1996 Increase66.8 Increase5,658 Increase1.7 % Negative increase24.4 % Negative increase9.0 % n/a
1997 Increase70.8 Increase5,910 Increase4.3 % Negative increase30.6 % Positive decrease7.8 % n/a
1998 Increase73.9 Increase6,077 Increase3.3 % Negative increase36.1 % Negative increase10.2 % n/a
1999 Decrease71.5 Decrease5,792 Decrease−4.7 % Negative increase52.2 % Negative increase13.1 % n/a
2000 Increase73.9 Increase5,901 Increase1.1 % Negative increase96.1 % Positive decrease7.6 % n/a
2001 Increase78.7 Increase6,139 Increase4.0 % Negative increase37.7 % Negative increase9.6 % 63.4 %
2002 Increase83.1 Increase6,350 Increase4.1 % Negative increase12.5 % Positive decrease7.8 % Positive decrease55.5 %
2003 Increase87.1 Increase6,540 Increase2.7 % Negative increase7.9 % Negative increase10.2 % Positive decrease49.0 %
2004 Increase96.9 Increase7,148 Increase8.2 % Increase2.7 % Positive decrease7.2 % Positive decrease43.0 %
2005 Increase105.3 Increase7,672 Increase5.3 % Increase2.2 % Positive decrease7.1 % Positive decrease38.7 %
2006 Increase113.3 Increase8,112 Increase4.4 % Increase3.3 % Positive decrease6.7 % Positive decrease38.1 %
2007 Increase118.8 Increase8,361 Increase2.2 % Increase2.3 % Negative increase6.9 % Positive decrease35.3 %
2008 Increase128.9 Increase8,905 Increase6.4 % Negative increase8.4 % Positive decrease6.0 % Positive decrease28.7 %
2009 Increase130.6 Increase8,860 Increase0.6 % Negative increase5.2 % Negative increase6.5 % Positive decrease25.3 %
2010 Increase136.8 Increase9,116 Increase3.5 % Increase3.6 % Positive decrease5.0 % Positive decrease23.1 %
2011 Increase150.7 Increase9,869 Increase7.9 % Increase4.5 % Positive decrease4.2 % Positive decrease21.4 %
2012 Increase162.1 Increase10,444 Increase5.6 % Negative increase5.1 % Positive decrease4.1 % Positive decrease20.6 %
2013 Increase172.9 Increase10,958 Increase4.9 % Increase2.7 % Negative increase4.2 % Negative increase21.1 %
2014 Increase182.6 Increase11,394 Increase3.8 % Increase3.6 % Positive decrease3.8 % Negative increase27.1 %
2015 Increase184.7 Decrease11,351 Increase0.1 % Increase4.0 % Negative increase4.8 % Negative increase33.8 %
2016 Decrease184.2 Decrease11,144 Decrease−1.6 % Increase1.7 % Negative increase5.2 % Negative increase42.9 %
2017 Increase192.6 Increase11,482 Increase2.7 % Increase0.4 % Positive decrease4.6 % Negative increase45.0 %

See also[edit]


  1. ^ a b c d e "World Economic Outlook Database, October 2019". International Monetary Fund. Retrieved October 21, 2019.
  2. ^ "Global Economic Prospects, June 2019: Heightened Tensions, Subdued Investment. p. 108" (PDF). World Bank. Retrieved October 21, 2019.
  3. ^ a b c d e "Ecuador". CIA. 2019. Retrieved April 13, 2019.
  4. ^ "GINI index (World Bank estimate)". Retrieved April 13, 2019.
  5. ^ "Ecuador". The World Bank Group. 2019. Retrieved April 13, 2019.
  6. ^ "Ecuador". International Labour Organization (ILO). Retrieved April 13, 2019.
  7. ^ "Ease of Doing Business in Ecuador". Retrieved January 24, 2017.
  8. ^ a b c d "Ecuador". The Observatory of Economic Complexity. Retrieved April 13, 2019.
  9. ^ "Ecuador Government Debt: % of GDP". CEIC Data. Retrieved April 13, 2019.
  10. ^ "Total reserves (includes gold, current US$)". Retrieved April 14, 2019.
  11. ^ a b c "OEC - Ecuador (ECU) Exports, Imports, and Trade Partners". Retrieved April 14, 2019.
  12. ^ a b "The Economy Of Ecuador". WorldAtlas. Retrieved April 14, 2019.
  13. ^ "Personal remittances, received (% of GDP) | Data". Retrieved April 14, 2019.
  14. ^ "Trade (% of GDP) | Data". Retrieved April 20, 2019.
  15. ^ a b "OPEC : Ecuador". Retrieved April 14, 2019.
  16. ^ Energy Information Administration - EIA (2017). "Country Analysis Brief: Ecuador" (PDF).
  17. ^ "Ecuador's economy to contract by 0.5 pct this year, IMF says". Reuters. March 21, 2019. Retrieved April 14, 2019.
  18. ^ "OPEC : Member Countries". Retrieved April 14, 2019.
  19. ^ "Ecuador". World Bank. Retrieved April 14, 2019.
  20. ^ a b c "Overview". World Bank. Retrieved April 14, 2019.
  21. ^ EcoEmerging (2018). "Ecuador: A delicate situation".
  22. ^ "Ecuador unlikely to nationalize oil sector". Reuters. July 17, 2009. Retrieved April 14, 2019.
  23. ^ "Ecuador and IMF Reach Staff-Level Agreement on a US$4.2 Billion Extended Fund Facility". IMF. Retrieved April 14, 2019.
  24. ^ "Ecuador Inflation rate (consumer prices)". Index Mundi. June 30, 2015.
  25. ^ a b c
  26. ^ "China draws fire on mega loan to Ecuador". Asia Times Online. June 26, 2010. Retrieved September 6, 2017.
  27. ^ "Ecuador to export energy to Colombia and Peru through El Inga electrical substation". January 8, 2016. Retrieved September 6, 2017.
  28. ^ Yahoo! Noticias España – Los titulares de hoy. (April 20, 2011). Retrieved on 2012-07-26.
  29. ^ El Banco Central de Ecuador sitúa el crecimiento del 2008 en más del 6%. (January 16, 2009). Retrieved on 2012-07-26.
  30. ^ Banco Central del Ecuador – Resumen de pib. (July 11, 2012). Retrieved on 2012-07-26.
  31. ^ Ecuador Inflation rate (consumer prices) – Economy. (July 26, 2012). Retrieved on 2012-08-21.
  32. ^ Gill, Nathan. (January 6, 2012) Ecuadorian Inflation Accelerated to Three-Year High in 2011. Bloomberg. Retrieved on 2012-08-21.
  33. ^ Ecuador en Cifras. Ecuador en Cifras. Retrieved on 2012-07-26.
  34. ^ Ecuador en Cifras. Ecuador en Cifras. Retrieved on 2012-07-26.
  35. ^ Ecuador : Financiamiento por volumen. Retrieved on 2012-08-21.
  36. ^ "Index of Poverty". Banco Mundial.
  37. ^ New Paper Examines Ecuador's Success in Emerging from Economic Recession; Reducing Poverty and Unemployment | Press Releases. (May 2, 2012). Retrieved on 2012-08-21.
  38. ^ Rebeca, Ray and Sara, Kozameh. (May 2012) P. 15. [1].
  39. ^ Ecuador. (May 11, 2012). Retrieved on 2012-07-26.
  40. ^ "Ecuador first-half trade surplus rises to $390 mln". Reuters. August 13, 2012.
  41. ^ Expreso Archived August 22, 2012, at the Wayback Machine Retrieved on 2012-07-26.
  42. ^ Usa., Int'L Business Publications, (2015). Ecuador company laws and regulations handbook : strategic information and basic laws. [Place of publication not identified]: Intl Business Pubns Usa. ISBN 1514508753. OCLC 910986831.CS1 maint: extra punctuation (link)
  43. ^ Trade Balance Details | Press Releases. (May 2, 2012). Retrieved on 2012-08-22.
  44. ^ Ecuador: Evolucion de la Balanza Comercial. Banco Central del Ecuador (January–February 2008).
  45. ^ Mapping for Results – Ecuador, Latin America & Caribbean.
  46. ^ Ranking 2010 – Ranking completo. Retrieved on 2012-07-26.
  47. ^ Industrias en CUENCA. Retrieved on 2012-08-21.
  48. ^ South American Community Nations – Andean Community -CAN Archived June 30, 2012, at the Wayback Machine. Retrieved on 2012-08-21.
  49. ^ Profile: Mercosur – Common Market of the South. BBC News (February 15, 2012). Retrieved on 2012-08-21.
  50. ^ Which are its member countries? Archived July 17, 2012, at the Wayback Machine
  51. ^ UNASUR (South American organization) – Britannica Online Encyclopedia. (May 23, 2008). Retrieved on 2012-08-21.
  52. ^ Union of South American Nations. Retrieved on 2012-08-21.
  53. ^ "Public Information Notice: IMF Executive Board Concludes 2007 Article IV Consultation with Ecuador". IMF. Retrieved June 12, 2018.
  54. ^ Ecuador student loan program increases funding for overseas study. (January 6, 1990). Retrieved on 2012-08-21.
  55. ^ a b c Ecuador’s Economy Since 2007 | Reports. Retrieved on 2012-08-21.
  56. ^ América Latina y el Caribe – Ecuador – Datos destacados. (May 17, 2005). Retrieved on 2012-07-26.
  57. ^ a b c Mapstone, (December 13, 2008). Ecuador defaults on sovereign bonds. Financial Times
  58. ^ "Report for Selected Countries and Subjects". Retrieved September 11, 2018.

External links[edit]