Extended Country Program Evaluation: Ecuador 2018-2025
Date issued
October 2025
Subject
Monitoring and Evaluation;
Loan Operation;
Country Strategy;
Country Program Evaluation;
Fiscal Policy;
Bank Loan;
Finance
JEL code
H83 - Public Administration • Public Sector Accounting and Audits
Country
Ecuador
Category
Technical Notes
This Extended Country Program Evaluation (XCPE) assesses the relevance, effectiveness, and sustainability of the IDB Group's support to Ecuador during 2018-2025, corresponding to the last two Bank Country Strategies (CS1: 2018-2021, CS2: 2022-2025). The evaluation seeks to contribute to accountability and learning by providing useful information to support the Board of Directors consideration of the future CS and the corresponding Country Program (CP), formulating recommendations to enhance the IDB Group's contribution to the country's development.
Ecuador is an upper-middle-income dollarized country whose economy is highly dependent on oil and other primary exports. The country faced a challenging macroeconomic environment in 2018-2025, characterized by low growth (1% per annum on average between 2018 and 2024), high volatility, and exposure to constant shocks, including the pandemic, droughts, energy crisis, political instability, and a security crisis. The fiscal consolidation process initiated after the commodity boom intensified during the period, with a significant reduction in public investment. Despite notable increases in social spending, poverty increased due to reduced economic growth and the impact of the pandemic. Insecurity rose sharply, with Ecuador moving from one of the safest countries in the region in 2018 to one of the highest homicide rates in 2023, with some improvement in 2024.
The IDB Group's strategies focused on three priority areas: productive, fiscal, and social. Objectives were broadly aligned with government priorities but lacked selectivity and clear sequencing. The program included 265 IDB operations (US$9,505 million) and 85 IDB Invest operations (US$2,414 million), doubling the estimated financing framework. The program was diversified and innovative, including the worlds two largest debt-for-nature conversions, thematic bonds, and IDB Invests first reverse factoring operation. It was responsive to emergencies and strongly aligned with most strategies' objectives. While the IDB was agile in approvals, execution faced significant challenges: almost three quarters of investment loans. Contributions were most significant in productive areas, certain social objectives (health, water, housing), and in the support to fiscal consolidation. OVE recommends articulating the next CS around inclusive and sustainable growth, anticipating synergies between IDB and IDB Invest, focusing on good performing executing units, and strengthening risk management.
Ecuador is an upper-middle-income dollarized country whose economy is highly dependent on oil and other primary exports. The country faced a challenging macroeconomic environment in 2018-2025, characterized by low growth (1% per annum on average between 2018 and 2024), high volatility, and exposure to constant shocks, including the pandemic, droughts, energy crisis, political instability, and a security crisis. The fiscal consolidation process initiated after the commodity boom intensified during the period, with a significant reduction in public investment. Despite notable increases in social spending, poverty increased due to reduced economic growth and the impact of the pandemic. Insecurity rose sharply, with Ecuador moving from one of the safest countries in the region in 2018 to one of the highest homicide rates in 2023, with some improvement in 2024.
The IDB Group's strategies focused on three priority areas: productive, fiscal, and social. Objectives were broadly aligned with government priorities but lacked selectivity and clear sequencing. The program included 265 IDB operations (US$9,505 million) and 85 IDB Invest operations (US$2,414 million), doubling the estimated financing framework. The program was diversified and innovative, including the worlds two largest debt-for-nature conversions, thematic bonds, and IDB Invests first reverse factoring operation. It was responsive to emergencies and strongly aligned with most strategies' objectives. While the IDB was agile in approvals, execution faced significant challenges: almost three quarters of investment loans. Contributions were most significant in productive areas, certain social objectives (health, water, housing), and in the support to fiscal consolidation. OVE recommends articulating the next CS around inclusive and sustainable growth, anticipating synergies between IDB and IDB Invest, focusing on good performing executing units, and strengthening risk management.
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