In 2024, Ecuador's economy experienced a contraction of 2.0% in its Gross Domestic Product (GDP). This decline was largely due to decreases in household consumption by 1.3%, government spending by 1.2%, and gross fixed capital formation (GFCF) by 3.8%. Despite these setbacks, exports grew by 1.8%, offering some relief from the overall economic downturn, while imports increased by 1.7%.
Among the sectors analyzed, five out of twenty showed positive growth: agriculture, livestock, and forestry at 3.1%; financial and insurance activities at 1.3%; real estate activities at 1.3%; health and social assistance at 0.3%; and food manufacturing at 0.2%.
The year was marked by various challenges impacting macroeconomic performance, including security issues, the gradual closure of oil wells in Block 43-ITT, political uncertainty ahead of the upcoming elections in 2025, and the most severe drought in six decades. The Central Bank of Ecuador estimated that power outages due to the drought resulted in losses amounting to USD 1.916 billion or -1.4% of GDP. The trade sector faced losses of USD -763.1 million, manufacturing USD -380.2 million, and services USD -374.1 million.
The fourth quarter of 2024 saw a year-on-year decrease of 0.9% compared to the same period in the previous year, driven by declines in GFCF (-2.6%), government spending (-0.8%), and an increase in imports (3.7%). Exports rose by 3.5%, while household consumption saw a slight increase of 0.2%.
Despite these challenges, there was a modest recovery in the fourth quarter compared to the third quarter with a growth rate of 1.3%. This improvement was supported mainly by strong performances in GFCF (3%), exports (2.6%), and household consumption (1.5%). Imports also grew by 3.1%.
Looking ahead to 2025, the Central Bank of Ecuador forecasts an economic recovery with an anticipated growth rate of 2.8%. This outlook is based on expectations for improved household consumption due to better credit conditions and labor market improvements; robust non-oil export performance particularly from non-traditional products and agriculture; as well as increased public and private investment backed by greater macroeconomic stability and structural reforms.
However, significant challenges remain for Ecuador's economy this year including security concerns, fiscal issues, external shocks such as falling oil prices amid potential global recession risks from new tariffs.
The current publication provides preliminary figures for the year 2024 with provisional figures expected in December 2025 followed by final figures in December 2026.
Alerts Sign-up