Ecuador's Recession Is Over — GDP Grew 3.7% in 2025, Central Bank Confirms

The Recession Is Officially Behind Us

The Banco Central del Ecuador (BCE) confirmed on March 25 what many of us have been feeling on the ground: the recession is over. Ecuador's GDP grew 3.7% in 2025, a sharp reversal from the 2% contraction in 2024 that made last year feel tight for everyone — businesses, workers, and yes, expats.

The final figure came in slightly below the BCE's earlier estimate of 3.8%, but the story is the same: Ecuador's economy recovered faster and more convincingly than most analysts expected.

What Drove the Growth

The numbers tell a clear story about where the money came from:

• Exports: up 6.4% — This is the big one. Ecuador's traditional export powerhouses all performed well: shrimp, cacao, bananas, canned fish, and minerals. If you've noticed more construction activity and commercial investment in coastal cities, this is why. Export revenue flows through the entire economy
• Investment: up 5.6% — Both public and private investment grew, meaning businesses and the government are spending on infrastructure, equipment, and development. This is the kind of growth that builds on itself
• Household consumption: up 2.7% — Ecuadorians are spending more, which means they're earning more (or at least feeling confident enough to spend). This is what drives the restaurants, shops, and services you interact with daily
• Government spending: up 0.04% — Essentially flat. The government didn't spend its way to growth — this recovery was driven by the private sector and exports, which is generally a healthier foundation

The 2026 Outlook

Here's where expectations get more modest. The BCE's forecast for 2026 is 1.8% growth — still positive, but a significant slowdown from 2025. That's partly because the 2025 number benefited from the rebound effect (growing from a low base after a recession). The 2026 figure reflects a more normalized growth rate for a dollarized economy with Ecuador's structural characteristics.

What This Means for Cuenca Expats

National GDP numbers can feel abstract, but they ripple through your daily life in concrete ways:

Cost of Living

Economic growth tends to push prices up — more money chasing the same goods and services. If you've noticed restaurants getting slightly more expensive or rent edging up, the 3.7% growth is part of the story. The good news is that 1.8% growth in 2026 suggests the pace of price increases should moderate. Cuenca remains affordable by North American and European standards, and that's not changing anytime soon.

Real Estate

Investment up 5.6% means more construction, more development, and a healthier real estate market. For expats who own property, this is positive — your asset is in a growing economy. For expats looking to buy, it means the window of recession-era deals is closing. Prices in desirable Cuenca neighborhoods are firming up, though they're still a fraction of what you'd pay in comparable cities in the U.S.

Employment and Services

When the economy grows, businesses hire and service quality tends to improve. If you've noticed better service at restaurants, more options for home repair, or easier access to professionals, a growing economy is the backdrop. The flip side: it gets harder to find cheap labor, as workers have more options.

Exchange Rate Stability

Because Ecuador uses the U.S. dollar, you don't have to worry about currency devaluation eating into your purchasing power — a huge advantage over neighboring countries. Ecuador's growth makes dollarization more sustainable, which is good for everyone.

The Broader Picture

A growing economy means a more stable Ecuador. It means less political unrest driven by economic desperation, better government revenue for services and infrastructure, and a generally more optimistic population. That's the environment you want to be living in as an expat.

The recession rattled confidence in 2024. The 3.7% recovery should restore some of it. The question now is whether Ecuador can sustain moderate growth in 2026 and beyond — and for Cuenca specifically, whether the city captures its share of the national expansion.

Sources: Infobae, Primicias