Between 2006 and 2014, GDP growth averaged 4.3%, driven by high oil prices and substantial external financing. This stimulus enabled increased social spending and important investments, especially in the energy and transportation sectors, as well as in education. According to official country information, poverty declined from 37.6% to 22.5% during that period. The Gini Index decreased from 0.54 to 0.47, given that growth benefitted the poorest population more than other segments.

Nevertheless, these achievements are threatened by deceleration and, more recently, by the economic slowdown the country has experienced in response to declining oil prices since 2014 and the stronger U.S. dollar. Poverty even rose slightly, from 22.5% in 2014 to 23.3% in 2015, which reflected an increase in rural poverty, from 35.3% to 39.3%. This situation was exacerbated by the devastating April 2016 earthquake on the Ecuadorian coast. The government initially estimated reconstruction costs at nearly 3 percentage points of GDP.

Given Ecuador’s lack of a local currency and the limited fiscal and external cushions, the country has been unable to apply macroeconomic policy to address the complex economic situation. Consequently, the new global context has led to a significant decline in domestic demand, especially public demand. The government has been forced to sharply reduce public investment and curb spending – a measure that has eased in recent months thanks to significant mobilization of external financing.  On the external front, the current account has stabilized through restrictions on movement of goods and capital. These measures have affected economic activity. The government is working to protect investments and rationalize public spending, and has imposed limits on labor market movements.

During this difficult period, Ecuador faces the challenge of adapting its economic structure to the new international context to achieve strong growth in the medium term and to protect key social advances made during the oil boom.  In this process, the country also faces the challenge of maintaining economic stability, although it is clear that there will be a period of low growth and a shift from less to more productive sectors. On the fiscal side, it is crucial to gradually increase public spending and make it more efficient. Finally, in a context in which public investment cannot continue to drive growth, the country must systematically improve the investment climate. More robust private sector activity will allow the country to diversify the economy, increase productivity and create quality jobs.

Last Updated: Oct 03, 2016

On March 15, 2016, the World Bank Group Executive Board approved the Country Engagement Note (CEN) for Ecuador. This document establishes the action framework agreed upon by the Government of Ecuador and the World Bank Group. The CEN will be in effect until June 2017.

The CEN prioritizes two work pillars:

  • Maintenance of the advances made in basic service delivery and strengthening of safety nets; and
  • Promotion of the diversification of the economy.

A crosscutting theme is the mitigation of risks of climate change and environmental threats.

Through these pillars, the World Bank will support government efforts to maintain social services for the most vulnerable populations, improve access to and quality of infrastructure and identify ways to promote economic diversification that is consistent with government demand.

In Ecuador, the World Bank has a portfolio of seven financing projects totaling US$868 million: Support to Education Reform in Targeted Circuits; Wastewater Management in Guayaquil; Automated Irrigation Systems for Small and Medium-sized Producers in Ecuador; Improvement of Transport Infrastructure of Ibarra; Improvement of Public Services of Manta; Risk Mitigation and Disaster Recovery in Ecuador; and Quito Metro Line One.  Additionally, the World Bank has provided grants and technical assistance to support different government sectors and agencies.

World-Bank financed projects of the Government of Ecuador are briefly described below:

The Project for Automated Irrigation Systems for Small and Medium-sized Producers seeks to improve irrigation management and income of farm families in Ecuador by optimizing land productivity. The project is jointly funded by the Spanish Agency for International Development Cooperation.

The Project to Support the Education Reform in Targeted Circuits works to promote enrolment in basic education and to improve attendance rates in secondary school in selected areas of the provinces of Pichincha, Los Ríos, Guayas and Bolívar.

The Project for Risk Mitigation and Disaster Recovery in Ecuador seeks to reduce the potential effects of El Niño and the eruption of the Cotopaxi Volcano, as well as to support the recovery of basic and productive services in the case of a natural disaster.

Last Updated: Oct 03, 2016

Key achievements of recently concluded projects include:

Investments for the Development of Chimborazo

The project rehabilitated 55 irrigation systems, which benefited approximately 8,000 families. Users with good agricultural practices have increased their income by 30%, as compared with farmers who do not employ those practices.

Additionally, 50 kilometers of roads were improved, enabling access to health and education services and transport of agricultural production. This resulted in a 50% reduction in transport time and a 55% savings in the maintenance of vehicles traveling those roads.

Promoting the Competitiveness of Ecuadorian Industries and Value Chains through the Strengthening of Supply of and Demand for Industrial Services

This advisory work for the Ministry of Industries and Productivity included two activities: the analysis of the supply of and demand for industrial services in Ecuador, with an emphasis on services to knowledge-intensive firms and on the design of a comprehensive plan of action to strengthen supply of and demand for industrial services, particularly services to companies.

This support included a review of selected good practices in international industrial and service policies and a comparative analysis of different policy alternatives to promote industrial competitiveness through services to knowledge-intensive firms.


Last Updated: Oct 03, 2016


Ecuador: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments