Ecuador Grew 3% in the First Quarter of 2025 and Forecasts an Encouraging Annual Outlook
After a 2024 marked by recession and power outages, the Central Bank of Ecuador reported an economic rebound driven by foreign trade and anticipated a trade surplus.
Ecuador recorded economic growth of 3% in the first quarter of 2025, according to Guillermo Avellán, General Manager of the Central Bank of Ecuador (BCE), during his remarks at the Second International Congress on Economics and Banking organized by Asobancos. The figure corresponds to the new economic activity index developed by the institution, which also projects annual growth of 2.8% by the end of 2025.
Despite the annual contraction, the fourth quarter of 2024 showed signs of economic recovery with quarterly growth of 1.3%. This rebound was driven by the solid performance of exports (2.6%), household consumption (1.5%), and gross fixed capital formation (3%). However, on a year-over-year basis, GDP for the fourth quarter declined by 0.9% compared to the same period in 2023.
One of the most notable figures presented by the BCE manager was the trade surplus. In 2024, Ecuador achieved a positive balance of nearly USD 6.7 billion—a historic figure that, according to official projections, is expected to continue with a surplus of USD 6.605 billion in 2025.
In his presentation, Avellán also emphasized that despite the challenging macroeconomic environment, the private banking system has remained liquid and solvent. This performance has been supported by several measures adopted by the BCE, including the strengthening of institutional capital, access to liquidity lines with international organizations exceeding USD 3.5 billion, and record highs in international reserves and net profits.
In the sectoral breakdown of the 2024 economy, only five sectors showed growth: agriculture, livestock, and forestry (3.1%); food product manufacturing (0.2%); financial and insurance activities (1.3%); real estate activities (1.3%); and health and social assistance services (0.3%). In contrast, fifteen sectors experienced contractions, including construction (-7.8%), mining and quarrying (-3.2%), and non-food manufacturing (-5.7%).
The report also attributes part of the GDP decline to the impact of fiscal measures adopted in March 2024 through the Organic Law to Address the Internal Armed Conflict and Economic Crisis. These included increasing VAT to 15%, raising the foreign currency outflow tax (ISD) from 3.5% to 5%, and creating temporary contributions on the profits of large companies. Despite their initial impact, these measures enabled Ecuador to reach an agreement with the International Monetary Fund (IMF), which approved a USD 4 billion Extended Fund Facility. In 2024, the country received disbursements totaling approximately USD 1.5 billion from this program.
