Beginning in 2010, the Ecuadorian economy began to recover from the effects of the global crisis, with a growth rate of 3.5%, reaching 7.8% in 2011 (the third highest rate in the region). Economic growth remained robust in 2012, with a growth rate of 5.1%. Growth remained strong through the third quarter of 2013, at an annual rate of 4.9%.
The government administration of President Rafael Correa Delgado—who was re-elected to another four-year term in February 2013 by a wide margin – has maintained the dual goals of strengthening the productive base and eradicating poverty. To this end, public investment has increased, from 21% of GDP in 2006 to nearly 41% in 2012. A large share of resources is allocated to programs and projects for investment in infrastructure and social sectors.
Economic growth in Ecuador has been inclusive, which has directly reduced poverty and inequality levels and increased the middle class. Between 2006 and 2013, income poverty (using the national poverty line) fell from 37.6% to 25.5% whereas extreme poverty declined from 16.9% to 8.6%.
Moreover, inequality in Ecuador decreased faster than the average for the region: the Gini coefficient fell from 54 to 48.5 between 2006 and 2013 whereas the middle class increased from 20% to 26% of the total population between 2006 and 2009. This is because income growth most benefitted the poorest citizens: between 2000 and 2011, the highest growth in income occurred in the poorest two quintiles of the population. Income of the poorest 40% of the population rose 8.8% compared with 5.8% for the average for the total population.
Despite these positive results, significant challenges remain in terms of the sustainability of these achievements in reducing poverty and inequality and in ensuring sustainable, inclusive growth. More than half of the Ecuadorian population continues to live in poverty or is vulnerable to again falling below the poverty line. Targeted public investments still largely depend on the oil sector.