Country risk drops sharply as reelection eases investor fears.

Ecuador’s country risk index plummeted in April, signaling a surge in investor confidence following President Daniel Noboa’s reelection. The index, which measures how international markets view Ecuador’s ability to repay its foreign debt, fell by 441 points over the course of the month—closing April at 1,189, down from 1,630 at the end of March.

The dramatic shift was driven primarily by political developments. On April 13th, Noboa won a clear victory in the runoff election against Correísta candidate Luisa González, securing 55.6% of the vote to her 44.3%. The next day, the country risk index saw its most significant single-day drop, falling 562 points from 1,844 to 1,282.

This sudden improvement in Ecuador’s financial standing reflects the relief felt by international creditors and investors, who had been watching the election closely for signs of political continuity or disruption. A lower country risk score translates to lower borrowing costs for the government, as lenders become more confident in the country’s fiscal direction and repayment reliability.

Markets Reward Political Clarity

The weeks leading up to the runoff had told a different story. Throughout March and early April, Ecuador’s country risk had steadily climbed, fueled by political uncertainty and the prospect of a closely contested election. On April 10th—just three days before the vote—the index reached a peak of 1,908 points, its highest level of the year.

Analysts attribute the spike to widespread nervousness in financial circles. Few polls were released before the second round, and those that were pointed to a tight race. The possibility of a return to the policies associated with former president Rafael Correa led some investors to anticipate fiscal volatility and institutional strain.

Noboa’s decisive win helped dispel those fears. His continuation in office, along with expectations of moderate economic stewardship, appeared to calm markets quickly. With a new mandate in hand, Noboa will now face the challenge of capitalizing on that confidence to negotiate better credit terms and stabilize public finances.

Oil Prices and Earthquake Jolt Later Gains

While April ended on a positive note for Ecuador’s financial outlook, not all indicators moved in the country’s favor.

Early in the month, as political uncertainty loomed, oil prices added to the anxiety. The price of West Texas Intermediate (WTI) crude—Ecuador’s benchmark—fell below $60 per barrel. Since oil exports play a central role in Ecuador’s economy and budget, declining prices translate directly into revenue pressure, raising questions about the country’s ability to meet its obligations.

Then, on April 25th, a 6.1 magnitude earthquake struck Esmeraldas Province, prompting new concerns. The country’s largest oil refinery, located in the affected area, suffered damage that led to the declaration of a 60-day operational emergency. The announcement was made by Petroecuador’s acting manager, Roberto Concha Rojas, on April 29th.

As a result, the country risk index, which had reached its lowest point of the month at 1,144, rose slightly in the final days of April—climbing 45 points to 1,189 by month’s end. The Esmeraldas Refinery processes up to 110,000 barrels of oil per day and is responsible for producing diesel, gasoline, asphalt, and domestic gas for nationwide distribution. Any extended shutdown could strain supply lines and put additional pressure on government finances.

Outlook Hinges on Follow-Through

Despite late-month setbacks, the overall trajectory of Ecuador’s country risk in April points to renewed market confidence. The decisive election result gave international lenders a reason to reassess the country’s political risk. But sustainability remains a question.

Maintaining investor trust will depend on the Noboa administration’s ability to navigate external shocks—like oil price volatility and natural disasters—while delivering on fiscal discipline and public investment goals. With the world watching, Ecuador has a narrow window to turn political clarity into long-term economic credibility.