Ecuador's economy expands, growth expected to continue into second quarter of 2026

Ecuador's economy demonstrated sustained expansion in the first quarter of 2026, with the Central Bank of Ecuador (BCE) anticipating this positive trend to continue through the second quarter. The nation's productive activity is currently exceeding its long-term trend, signaling a favorable economic outlook.

The Gross Domestic Product (GDP) saw a 2.1% increase compared to the first quarter of 2025. This growth was primarily fueled by a 3.9% rise in household consumption and a significant 12.8% surge in gross fixed capital formation, which represents investment in productive assets. The expansion was broad-based, with 16 out of 20 economic activities reporting growth.

Several factors are contributing to this favorable economic performance. These include increased public oil revenues, robust sales growth in the construction, manufacturing, and trade sectors, a rise in financial system operations, and higher value-added tax (VAT) collection. These indicators suggest increased economic activity, which typically translates to higher production and employment. Furthermore, improved access to credit is likely facilitating new investments by businesses and households.

While oil's share in Ecuador's economy has decreased over the past decade, it remains a crucial source of state revenue and a significant influence on fiscal accounts and foreign trade. The BCE's analysis, which identifies whether economic activity is accelerating or losing momentum, confirms that Ecuador is in an expansive phase of its economic cycle, with both the GDP cycle and the Composite Coincident Indicator remaining above the threshold that signifies growth above the long-term trend.