Household consumption, rising exports, and higher investment push GDP up 4.3% in the second quarter

Growth led by consumption and exports

Ecuador’s economy expanded by 4.3% in the second quarter of 2025, signaling a stronger-than-expected recovery fueled by household consumption, non-oil exports, and renewed investment, according to new data from the Central Bank of Ecuador (BCE). The figure marks an improvement from the 3.7% growth recorded in the first quarter, underscoring a steady upward trend despite continued challenges in the oil sector.

At the presentation of the National Accounts II 2025 at Universidad de Espíritu Santo, Central Bank Manager Guillermo Avellán said household consumption rose by 8.7%, boosted by food purchases, consumer credit, and remittances. “There is very good news for the economy despite the difficulties in oil production,” he noted.

Non-oil exports climbed 7.9% compared with the same quarter last year, driven by strong demand for bananas, shrimp, cocoa, and canned fish. These industries have become critical sources of both employment and foreign currency inflows. Meanwhile, fixed investment rose 7.5%, reflecting higher demand for transportation equipment and capital goods for agriculture and industry.

Public spending and imports on the rise

Government expenditure also grew, albeit modestly, increasing 0.4% due to higher spending in the health and security sectors. Imports surged 16% year-on-year, fueled by stronger demand for consumer goods, construction materials, and raw materials. Avellán cautioned against viewing the rise in imports as negative, explaining that it reflects a broader recovery of domestic production and demand.

Fifteen of Ecuador’s twenty major industries posted year-on-year growth in the second quarter. The strongest performers were financial services and insurance (13.6%), agriculture and forestry (10.1%), fishing and aquaculture (8.7%), food manufacturing (8.3%), construction (6.7%), and trade (6%). Petroleum refining remained the weakest link, contracting due to production and refining challenges that are expected to persist into the third quarter.

Quarter-on-quarter, GDP dipped slightly by 0.1%, mainly due to an 8.8% increase in imports and a temporary slowdown in construction-related investment. “Construction usually accelerates in the final half of the year, so this pattern is seasonal,” Avellán said.

Upward revisions to 2025 growth forecasts

Despite sectoral challenges, the Central Bank has raised its full-year growth projection for 2025 to 3.8%, citing a stronger performance in domestic demand and exports. This revision comes after the 2% contraction Ecuador experienced in 2024, largely the result of severe drought conditions that disrupted energy production and agriculture.

The International Monetary Fund (IMF) also revised its forecast upward this week, estimating Ecuador’s 2025 GDP growth at 3.2%, compared to its April projection of 1.7%. The World Bank remains more cautious, projecting 2.3% growth by year’s end.

Avellán said the BCE’s estimates for 2025 remain conservative, based on expectations of reduced oil production and an average export price below $60 per barrel. “We anticipate growth close to 4%, supported by expanding agricultural and manufacturing output,” he said. For 2026, the Bank projects a more moderate 2% increase.

According to the BCE, 18 of the country’s 20 productive sectors are expected to grow this year, with the largest gains projected in agriculture (13%), food manufacturing (8%), entertainment and recreation (5.4%), trade (4.7%), and finance (3.9%). The only contraction is expected in oil extraction, which continues to weigh on the overall mining and quarrying category.

Stable inflation and external performance

The Central Bank projects no major inflationary pressures through September 2025. Annual inflation stands at 0.72%, while cumulative inflation through September is 2.23%. Food inflation remains stable at 2.2%. “Preliminary data show no significant price increases. We await October and November figures to confirm this trend,” Avellán said.

The external sector has also performed well. Between January and August, Ecuador’s total exports rose nearly 8% year-on-year, reaching $24.4 billion. Non-oil exports surpassed $19 billion, while oil exports — at $5.26 billion — hit their lowest level in five years.

Shrimp exports totaled $5.56 billion, overtaking oil as Ecuador’s leading export. Cocoa shipments surged 65% in value and 36% in volume, now exceeding banana exports, which have also rebounded to $2.89 billion. “These figures show the transformation of Ecuador’s export base toward higher value-added and sustainable products,” Avellán emphasized.

Regional comparison and global context

In regional terms, Ecuador ranks third in South America for expected growth in 2025, behind Argentina (4.5%) and Paraguay (4.4%), according to the IMF’s World Economic Outlook. Inflation projections are also among the most favorable in the hemisphere, with the IMF forecasting 1.1% in 2025 and 2.8% in 2026 — the lowest on the continent.

However, the IMF warns that the country faces a narrowing current account surplus, expected to fall from 5.7% of GDP in 2024 to 4.9% this year and 3.4% by 2026. It also forecasts a slight rise in unemployment, from 3.4% to 4% in 2025.

Even so, Ecuador’s near-term outlook remains positive. The economy’s resilience, driven by domestic consumption, export diversification, and stable inflation, suggests the recovery is broad-based. “Our data show that Ecuador is growing on multiple fronts,” Avellán concluded. “That’s the clearest signal that confidence and investment are returning.”