Rising amortizations, short maturities, and bond repayments force the government to juggle refinancing, credibility, and fiscal survival.

Ecuador is heading into one of its most demanding fiscal years in recent memory, with public debt payments scheduled for 2026 climbing sharply and compressing the government’s room to maneuver. According to official budget projections, total debt amortizations due that year will reach roughly $8.35 billion, a jump of more than $2.5 billion compared with 2025 and a level that places unusual strain on both public finances and investor confidence.

The scale of the obligation is striking. Spread across the population, the 2026 debt bill would amount to about $521 per Ecuadorian. For the administration of President Daniel Noboa, the figure underscores the magnitude of the challenge at a time when the state is also seeking fresh borrowing to keep the budget afloat.

A steep jump from one year to the next

The increase is driven by a convergence of domestic and external obligations coming due at the same time. Of the total payable in 2026, around $3.95 billion corresponds to external creditors, while domestic debt accounts for approximately $4.4 billion. By comparison, combined debt payments in 2025 totaled about $5.84 billion.

Former finance officials argue that the sudden rise is not accidental but structural. Much of Ecuador’s recent borrowing, they note, was contracted on relatively short maturities, often under 10 years. Shorter terms reduce refinancing flexibility and translate into higher annual payments, especially once grace periods expire.

This dynamic is particularly visible in loans from multilateral lenders and in portions of domestic debt, both of which begin to demand heavier amortizations in 2026 and beyond. At the same time, the government must secure new financing estimated at more than $16 billion to sustain the 2026 state budget, adding another layer of complexity to an already crowded debt calendar.

Bonds come due after years of relief

One of the most consequential shifts in 2026 is the return of principal payments on Ecuador’s international bonds. Following the 2020 restructuring carried out during the administration of Lenín Moreno, the country benefited from several years in which it paid interest but not principal on restructured bonds.

That period of relief ends in 2026. According to the Ministry of Finance, Ecuador will have to repay $813.2 million in bond principal that year, split into two installments scheduled for January and July. These payments mark the beginning of a cycle that will intensify between 2026 and 2029, when the largest bond maturities fall due.

Former officials warn that the end of the grace period leaves Ecuador once again exposed to tight financing conditions. Without some form of renewed flexibility, they argue, the government risks crowding out essential spending or relying excessively on short-term fixes.

Domestic debt and interest costs

While international markets often draw the most attention, domestic debt represents an equally persistent burden. Annual payments on internal obligations are expected to average about $1.48 billion between 2026 and 2040, making them a long-term fixture of the fiscal landscape.

Domestic debt also carries higher interest costs. Average rates are close to 8% annually, nearly double the average rate on external debt, which stands near 4.4%. This disparity means that even modest increases in domestic borrowing can quickly inflate future payment obligations.

The combination of high interest rates and long repayment horizons limits the government’s ability to shift the burden easily. Unlike external debt, domestic obligations cannot be refinanced abroad without political and financial consequences at home.

Multilateral lenders tighten the calendar

Debt to multilateral institutions adds another layer of pressure in 2026. Total payments to these lenders are projected at about $2.32 billion, with the largest share owed to the International Monetary Fund. Repayments to the IMF alone are expected to exceed $1.09 billion in 2026.

IMF loans are typically structured over shorter time frames than those of other multilateral banks, which means higher annual installments once repayments begin. From 2026 through 2030, Ecuador is expected to pay more than $1 billion per year to the Fund.

Other institutions, such as the Inter-American Development Bank, offer longer maturities and lower annual payments. Even so, Ecuador will still owe close to $678 million to the IDB in 2026, underscoring how multilateral debt, while cheaper, still weighs heavily on the payment schedule.

Searching for breathing room

Facing this concentration of obligations, the government has signaled that it is exploring new forms of debt management. Economy and Finance Minister Sariha Moya has suggested the possibility of further debt swaps backed by guarantees, similar to past operations linked to environmental conservation in the Galapagos and the Amazon.

Analysts caution, however, that such swaps are typically limited in scale. While they can provide symbolic and targeted relief, they are unlikely to address the bulk of Ecuador’s financing needs or materially reduce the 2026 payment spike.

At the same time, officials have acknowledged that the country cannot continue relying primarily on multilateral lenders. As a result, the 2026 budget includes provisions for a return to international bond markets, with a planned issuance of up to $3 billion.

Country risk and investor confidence

Reentering capital markets hinges on a critical variable: country risk. Government officials have stated that Ecuador would need to lower its risk premium to around 300 points to issue bonds at manageable interest rates. As of mid-December 2025, that indicator remained above 500 points.

The months of January and July 2026 are expected to be decisive. Timely payment of bond amortizations due in those months could help rebuild investor confidence and push the risk premium downward. If successful, Ecuador could borrow at annual rates in the range of 7.5% to 8%, a level seen as high but potentially sustainable under current conditions.

Whether those payments translate into lasting confidence will determine how much room the government has to refinance its obligations. With debt repayments cresting and new borrowing needs mounting, 2026 is shaping up as a test not only of Ecuador’s fiscal arithmetic, but of its credibility with creditors at home and abroad.