Ecuador

In-depth country-focused analysis on Ecuador's economic, political and operational risk environment, complemented by detailed sector insight

Ecuador

Our comprehensive assessment of Ecuador's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Ecuador, as well as the latest industry developments that could impact Ecuador's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Ecuador before your competitors.

Ecuador Operational Risk Coverage (9)

Ecuador Operational Risk

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BMI View: Ecuador remains one of the more unattractive countries in the region from a trade and investment perspective. While the market is technically open to investment, a number of regulatory changes since 2007 have acted as a significant deterrent. Combined with high levels of corruption, significant red tape and poor enforcement of intellectual property laws, this has acted to stymie foreign investment. While we have seen the government take modest steps to improve the business environment, and expect a return to capital markets in the coming year, we believe that fundamentally there will be little significant shift in policy, keeping us cautious. We have given Ecuador a score of 37.8 out of 100 in our Trade and Investment Risk Index, putting it in 37th place in the Latin America region, just behind Argentina (39.1) and...

Ecuador Crime & Security

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BMI View: Ecuador presents many challenges to businesses owing to its crime and security situation. Spillover from the country's neighbours increases insecurity in the north of the country and allows organised crime syndicates to take root. This is aided by police corruption and collusion, leaving the country vulnerable to fraud, money laundering and smuggling. These factors increase costs to businesses by necessitating the implementation of private security measures. As a result, Ecuador scores a low 34.7 out of 100 for its Crime and Security Risk, placing it in 35th position out of 42 countries in the Latin America and...

Ecuador Labour Market

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BMI View: Overall, Ecuador boasts a large labour force and a growing pool of skilled workers providing significant opportunities, and recent reforms cutting down on unemployment and underemployment. However, onerous regulations, a high degree of unionisation, and a generally unfriendly business environment keep costs high. As a result, Ecuador sits in the middle of pack in Latin America with regards to Labour Market risks.

Ecuador has a Labour Market Risk score of 53.4 out of 100. This puts it in 10 th place in Latin America, between Mexico and Venezuela (which have scores of 54.6 and 52.9 respectively), and 11.2 points behind regional leader Chile.

Availability of Labour risks is relatively muted in Ecuador, due to a substantial labour force and favourable demographics. Indeed, Ecuador has a large pool of unskilled workers to fill a substantial number of jobs in the agricultural and...

Ecuador Logistics

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BMI View : Ecuador's strong trade flows and large market size make the country an attractive destination for investors. Companies breaking into or expanding in the country will, however, face logistics risks. The uneven extent and quality of the country's transport network increases lead times, which, coupled with bureaucratic hurdles, raises operating costs. Overall, the country scores an above average 55.4 out of 100 in the BMI Logistics Risks Index, placing it in a competitive place regionally...

Ecuador Trade & Investment

BMI View:

BMI View: Ecuador remains one of the more unattractive countries in the region from a trade and investment perspective. While the market is technically open to investment, a number of regulatory changes since 2007 have acted as a significant deterrent. Combined with high levels of corruption, significant red tape and poor enforcement of intellectual property laws, this has acted to stymie foreign investment. While we have seen the government take modest steps to improve the business environment, and expect a return to capital markets in the coming year, we believe that fundamentally there will be little significant shift in policy, keeping us cautious. We have given Ecuador a score of 37.5 out of 100 in our Trade and Investment Risk Index, putting it in 22nd place in the greater Latin America and Caribbean region, between the Dominican Republic (38.1) and Guatemala (36.4), and well behind the region's top performer, Barbados (61.2).

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Ecuador Industry Coverage (5)

Autos

Ecuador Autos

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BMI View: In the current global economic climate of low oil prices, Ecuador's new vehicle market and local vehicle manufacturing industry will sink deeper into recession as import controls are ramped up, while Ecuador's oil-dependent economy shifts into a period of tepid growth.

Passenger Car and Light Commercial Vehicle Sales
(2013-2019)
f = BMI forecast. Source: AEADE, BMI
Key Views
...

Infrastructure

Ecuador Infrastructure

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BMI View: Ecuador's infrastructure development will slow considerably over the next five years as the country faces the widest budget deficit in decades, mainly due to the sustained low oil price. The government's push for PPPs will be critical to maintaining growth in the construction industry, particularly in the transport sector where there is a sizable project pipeline.

Latest Updates And Structural Trends

  • After a considerable slowdown in Ecuador's construction industry growth in 2015, we expect growth to remain moderate over the coming years. We forecast an average of 3.1% real growth between 2016 and 2020 by comparison to the 9.7% between 2010 and 2014.

  • Falling oil prices will have a detrimental impact on the government's...

Oil & Gas

Ecuador Oil & Gas

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BMI View: Ecuador's upstream sector will largely suffer from the broader industry downturn through the remainder of the decade, but its downstream sector is likely to shift to net exporter status by 2019. We hold a downbeat growth outlook for the country as a result of increasingly limited upstream prospects and continued uncertainty regarding the future of Ecuador's largest untapped oil field.

Headline Forecasts (Ecuador 2013-2019)
2013 ...

Pharmaceuticals & Healthcare

Ecuador Pharmaceuticals & Healthcare

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BMI View: The steadily growing Ecuadorian pharmaceutical market will provide revenue-earning opportunities for multinational drugmakers. Because Ecuador utilises the US dollar, the country will be more appealing to drugmakers which report in the currency, particularly as the dollar maintains its strength in 2016. As the government continues to prioritise foreign investment into the country, Ecuador will become increasingly attractive to multinational drugmakers.

Headline Expenditure Projections

Pharmaceuticals: USD1.5bn in 2014 to USD1.6bn in 2015; +5.7% in US dollar terms. Forecast has been maintained from Q415.

Healthcare...

Telecommunications

Ecuador Telecommunications

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Regulatory changes at the beginning of 2015 continue to advance the more controversial aspects of operating in Ecuador's telecoms market. In the past, the government has shown a tendency to protect CNT from private competition and the new regulation instituted during 2015 will not change this trend, with additional taxation and high cost of 4G spectrum licences. The launch of 4G by Claro and Movistar will bring competition to this segment where CNT has operated exclusively since 2013. Broadband will be one of the fastest growing sectors over our forecast period, backed by CNT investment in fibre and coverage expansion beyond major towns and cities.

Although 4G services were launched by incumbent Corporacion Nacional de Telecomunicaciones in late 2013, we see little prospect of the service taking off before more spectrum is awarded to other players. The move to...

Latest Ecuador Articles

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Latest Ecuador Blogs

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Latest Ecuador Podcasts

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