Ecuador after two and a half years of Noboa
President Noboa did not inherit an easy country to run. Creeping political instability during the year and a half of President Guillermo Lasso’s government, ending in his dismissal, prevented Ecuador from reaching its potential growth rate or recovering adequately from the crisis of Covid-19.
Large fiscal deficits between 3% and 5% of GDP and poor foreign investment forced governments since 2015 to finance by means of public debt, which between 2021 and 2025 increased by $13,905 million. Interest payments rose from $1974 million per year to $4085 million during the same period, becoming the second largest expenditure after education.
In the last four years, citizens watched in astonishment and fear as Ecuador transformed from “an island of peace” into one of the most violent countries in the world. Hence President Noboa's priority to stabilize the fiscal sector and fight violence and organized crime.
The first objective has been accomplished with recognizable success after eliminating subsidies on derivatives—a bold and politically challenging decision that returned Ecuador to the international bond markets even though the road to recovering sustainability for the medium term and beyond remains long and difficult. But achievement of the second objective has been elusive despite the efforts displayed and the money spent by citizens through taxes.
The agreement with the United States to have US troops working together in situ with Ecuadorian armed forces has been well-received by most Ecuadorians and has raised hopes of positive results ahead. But public opinion believes it has not been enough to make up for the high cost of living coming from expensive fuel, nor for political decisions that have raised the perception of an authoritarian president who leaves the country too often and without much explanation.
Therefore, public support for Noboa’s management has fallen from 75% in April 2024 to 42% in June 2026 after a low of 39% last May, when derivatives prices reached a peak and scarcity tried people’s patience.
We expect that since the fiscal sector is under better control, in his remaining time in office, President Noboa will develop clear policies for the oil, mining and electricity sectors, which are in critical need of investment for recovery and development. We hope he will at least acknowledge the risk of failing to take action on the vulnerable situation of the Social Security Institute.
The government has started to develop an industrial policy aimed at increasing competitiveness, diversification and efficiency in the private sector. This effort is under the responsibility of the Ministry of Production, which be unified in one mega agency with the Ministry of Agriculture and the Ministry of Finance, with Sariha Moya as its head. We hope that such a challenging integration does not kill or delay this important initiative.
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