El Niño 2026-2027: Anticipating Economic Impact on Ecuador's Productive Sector

The El Niño phenomenon, a natural climate variation occurring every two to seven years, is projected to strengthen in the coming months, with a 75% probability of reaching a historic intensity by the end of 2026, according to the National Oceanic and Atmospheric Administration (NOAA). The World Meteorological Organization (WMO) also predicts a very strong intensity by late 2026, with the climax potentially occurring between October and December 2026.

Historically, extreme climate events like El Niño have significant economic consequences beyond infrastructure damage and social capital. The 1997-1998 El Niño event resulted in national losses totaling USD 2,869 million, with the productive sector absorbing 52.8% of this impact. The overall economic impact represented 15% of Ecuador's Gross Domestic Product (GDP) at the time. For every dollar of direct material damage, Ecuador experienced approximately USD 2.66 in indirect losses or unearned income due to lost profits.

Analysis indicates that the primary economic impact for businesses during such disasters stems not from physical infrastructure destruction, but from lost profits and operational surcharges. During the 1997-1998 El Niño, operational paralysis and additional expenses to maintain operations accounted for 75% of the total impact for businesses.

In early September 2026, the Escuela Superior Politécnica del Litoral (Espol), in alliance with the Cámara de la Construcción de Guayaquil, hosted 'El Niño 360°: Anticiparse es la mejor estrategia'. This event brought together oceanographers, academics, and business representatives to provide technical tools for risk anticipation and operational resilience against the 2026-2027 El Niño threat. Discussions highlighted vulnerabilities in electricity supply and generation deficit as parallel contingencies that could affect the productive sector.

What to watch

Provinces such as Los Ríos, Guayas, El Oro, Manabí, and Esmeraldas contain 3.1 million hectares of crops with high and medium susceptibility to El Niño. The flooding of export crops in the Coast region is expected to concentrate a significant portion of the national economic impact. For example, Los Ríos province, which concentrated 111,887 hectares of harvested cocoa surface as of 2023, faces risks. Cocoa plantations can suffer severe damage if waterlogged for more than three or four days, potentially leading to plant death or significant yield reductions. A plantation with a usual yield of 30 quintals per hectare could drop to 10-15 quintals under persistent adverse conditions. The second main cocoa harvest peak, typically between March and April, is a period of concern given the climate event's timing.

Analysis: The historical data underscores the importance of proactive measures for businesses to mitigate indirect losses from operational disruptions. The focus on strengthening operational resilience and contingency planning, as discussed at the Espol event, appears aligned with past economic outcomes where lost profits and operational surcharges constituted the majority of business impact.

Sources: primicias.ec; primicias.ec; eluniverso.com.