Ecuador

Ecuador is a country defined by striking geographical and cultural contrasts. The majestic Andes, the rich biodiversity of the Amazon, the Pacific coastline, and the Galapagos Islands converge with a deep indigenous heritage, colonial legacy, and aspirations for modern development.

The economy remains heavily reliant on oil, agricultural exports—such as bananas, cocoa, and shrimp—and tourism. This dependence makes Ecuador vulnerable to external shocks, including international price fluctuations and natural disasters. Since its adoption in 2000, dollarization has served as a key stabilizing mechanism against inflation.

Major challenges include widespread informal employment and pronounced regional inequalities, particularly between urban and rural areas. Climate vulnerability—manifested through droughts, extreme rainfall, and variability—poses increasing risks to agricultural productivity, water resources, and infrastructure.

Despite these challenges, Ecuador possesses notable strengths. It boasts extraordinary biodiversity, significant potential for renewable energy (hydroelectric, solar, and wind), internationally recognized agricultural sectors, and a young population characterized by resilience and adaptability.

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After a contraction of 2% in 2024, Ecuador’s economy rebounded with an estimated growth of 3.7% in 2025, driven by exports, investment, and private consumption.

The outlook for 2026–2028 points to stabilization around 2.5%, conditional on a reduction in political uncertainty and the consolidation of fiscal progress. In terms of poverty, it is estimated to have declined to 30.1% in 2025 (USD 8.30 per day line), with projections indicating a continued decrease to 28.1% by 2028.

A significant milestone was Ecuador’s return to international capital markets in January 2026, reflecting renewed investor confidence. This achievement is framed within the Government’s commitment to the IMF Extended Fund Facility (EFF) program.

On the fiscal front, the deficit stood at 2.9% of GDP in 2025, and public accounts are expected to approach balance in 2026, supported by higher oil prices.

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The World Bank’s current program with Ecuador comprises 12 projects, including investment and development policy financing operations, representing a total of US$3.92 billion.

In addition, the World Bank supports a broad technical assistance program in areas such as energy, macro-fiscal reforms, migration, financial inclusion, infrastructure, competitiveness, and sustainable transportation.

The International Finance Corporation (IFC) has a committed exposure of approximately US$617 million in Ecuador, distributed across 11 institutions and six sectors. Meanwhile, the Multilateral Investment Guarantee Agency (MIGA) maintains an exposure of US$19 million in the manufacturing sector.

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The current Country Partnership Framework with Ecuador 2019–2023 (extended to 2026) of the World Bank Group supports the country’s development through three focus areas: inclusive growth, human capital development, and institutional and environmental sustainability.

Developing human capital with skills aligned to labor market demands, alongside policies informed by timely, evidence-based data, will not only foster inclusive growth but also enhance the country’s resilience to disasters and macroeconomic shocks.

Moreover, more efficient public spending and the adoption of international transparency standards in public administration will contribute to the sustainability and protection of social services. Progress in the first two pillars will also help Ecuador improve access to financial markets and lay the groundwork for institutional strengthening as the country advances on its development path.

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The CPF program provided quick and effective responses to complex emergencies, simultaneously addressing and meeting urgent recovery and resilience needs from the COVID-19 pandemic and climate shocks. In addition, the program demonstrated its value through subnational infrastructure operations, particularly through the megaproject Quito Metro Line one (PLMQ). This megaproject is transforming urban transport by linking with Bus Rapid Transport (BRT) systems while reducing harmful emissions.

The International Finance Corporation (IFC) and the World Bank assisted the GoE in improving the country’s capacity to implement public private partnerships (PPPs). MIGA reengaged with Ecuador and provided political risk insurance to facilitate access to foreign financing for a local manufacturing firm. In 2020, MIGA issued its first guarantee in over a decade.

Credit to MSMEs has also expanded, aided by the Bank’s support for restructuring the CFN and the development of credit lines for second tier lenders toward beneficiary MSMEs. The IFC and Bank supported interventions seeking to improve access to finance for Small and Medium-sized Enterprises (SMEs).

Through the Supporting Education Reform in Targeted Circuits project, the Bank assisted the GoE in increasing the access to and quality of education in some of Ecuador’s poorest areas In the end, early education enrollment of 4-year-old children in targeted parishes increased to 8,667 children in 2023.

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