Stronger consumption, investment and exports have improved this year’s outlook, while climate risks loom over 2027.

Economy performing better than expected

Ecuador’s economy is on track to grow faster this year than previously expected, with the Central Bank raising its 2026 growth forecast from 2.5% to 2.7%.

The September revision reflects stronger household consumption, investment and exports, providing some welcome economic news after several years in which Ecuador has struggled with weak growth, fiscal pressures and disruptions to electricity production.

The improved forecast does not mean Ecuador is entering an economic boom. Growth of 2.7% remains relatively modest, and the Central Bank is already warning that another threat could substantially change the picture in 2027: El Niño.

For this year, however, several important economic indicators are moving in the right direction.

Household consumption is projected to increase 3.3% in 2026, while gross fixed capital formation—a measure that includes investment in machinery, buildings and other productive assets—is expected to rise 5.8%.

Exports of goods and services are projected to grow 3.8%.

Those three components are among the principal reasons the Central Bank increased its growth estimate.

More credit and money in the banking system

The financial sector is also expected to expand substantially.

Credit to Ecuador’s private sector is projected to grow 10.9% this year, while deposits in the financial system are expected to rise 11.5%.

More available credit can help households finance purchases and allow businesses to invest and expand, although borrowing costs and access to financing remain important considerations for individual consumers and companies.

Ecuador’s international reserves are projected to reach approximately $11.24 billion by the end of 2026.

The Central Bank also expects Ecuador to finish the year with a current-account surplus of approximately $4.59 billion, meaning the country is projected to receive more through trade, investment income and transfers than it sends abroad.

Remittances from Ecuadorians living overseas continue to play an important role in that equation and in household spending.

Inflation, meanwhile, remains relatively restrained. The Central Bank projects average inflation of 2.1% for the year.

Exports are providing another boost

Foreign trade has been one of the stronger parts of the economy.

Between January and July, Ecuador exported $23.29 billion in goods, an increase of 9.3% compared with the same period in 2025.

Shrimp has now overtaken petroleum as the country’s largest export product. Shrimp exports totaled approximately $5.77 billion through July, up 17.6% from a year earlier.

Oil exports totaled $5.72 billion, while mining exports reached almost $3.18 billion, an increase of 43.5%.

Banana and plantain exports also increased, reaching approximately $2.74 billion.

Cacao has moved sharply in the opposite direction. Exports of cacao and cacao products totaled about $1.20 billion through July, a decline of 54.6% from the same period last year.

Overall, Ecuador recorded a trade surplus of approximately $2.84 billion during the first seven months of 2026.

Growth has been uneven

The stronger forecast also masks significant differences between sectors.

Services, manufacturing, construction and commerce have been among the stronger performers, while agriculture and petroleum-related activity have faced more uneven conditions.

That matters because commodities and agriculture remain important sources of employment, export revenue and foreign currency.

The national growth rate therefore does not mean every industry—or every part of Ecuador—is experiencing the same economic conditions.

El Niño becomes the big unknown

The Central Bank’s September forecast also includes estimates of how much El Niño could damage Ecuador’s economy if the phenomenon becomes significant.

The Bank modeled both moderate and strong scenarios.

Under a moderate El Niño scenario, economic growth in 2027 could be approximately half a percentage point lower than it otherwise would have been.

A strong event could reduce growth by as much as 1.4 percentage points.

The Central Bank emphasizes that those figures are scenarios, not predictions that El Niño will necessarily reach either intensity.

The economic risks are nevertheless substantial.

Heavy rainfall and flooding can damage crops, roads, bridges and other infrastructure, interrupt transportation and reduce agricultural production and exports. At the same time, changes in rainfall patterns can affect hydroelectric generation, making the economic consequences more complicated than simply having too much or too little rain.

For 2027 through 2030, the Central Bank currently projects average annual economic growth of approximately 2.5%, driven primarily by non-oil activity, household consumption, investment and exports.

That longer-term forecast assumes Ecuador avoids major economic shocks.

For 2026, at least, the numbers have moved slightly in Ecuador’s favor. The economy is growing faster than the Central Bank expected earlier this year, investment is increasing, exports are expanding and credit is flowing more rapidly.

Whether that momentum survives into next year may depend considerably on what happens with the weather.