Articles
Business intelligence and analysis on Ecuador
US-Ecuador Joint Strike Hit Dairy Farm -- Military Operations Under Scrutiny
A New York Times investigation has revealed that a joint US-Ecuador airstrike under Operation Southern Spear -- active since March 3, 2026 -- struck a cattle and dairy farm in San Martin, not a narcotics facility as Defense Secretary Pete Hegseth had publicly promoted. Workers at the site reported beatings and electrical shocks during post-strike detention. The findings raise questions about oversight of the bilateral security campaign, which has logged 4,300+ arrests since launch.
Noboa Cuts VAT to 8% for Tourism Services via Decree 348
President Daniel Noboa signed Executive Decree 348 on March 31, 2026, temporarily reducing Ecuador's value-added tax (IVA) from 15% to 8% for tourism services during the April 3-5 Semana Santa holiday period. The measure covers accommodation, food and beverage, transport, travel agencies, and ecotourism operators. The SRI is implementing administrative guidelines for compliance.
Decree 273 Overhauls Mining Royalties with 3-8% Sliding Scale
Executive Decree 273 overhauls Ecuador's mining royalty framework, replacing the previous flat-rate system with a 3-8% sliding scale tied to LME three-year trailing averages. The decree mandates 100% self-power generation for mining operations, caps the total state take at 50%, and reopens the metallic mineral concession registry that has been frozen since January 2018.
World Bank Projects 2% GDP Growth for Ecuador in 2026; Tax Reform Likely
The World Bank projects Ecuador's GDP will grow 2% in 2026, among the lowest rates in Latin America. With a fiscal deficit of 3-4% of GDP, the expiration of the security contribution ($330 million), and weakening oil receipts, multilateral institutions consider tax reform increasingly likely. The government faces a structural revenue gap that existing measures cannot close.
Europol-Ecuador Operation Dismantles Los Lobos Trafficking Network -- 7+ Tonnes Seized, High-Value Target Captured
A joint Europol-Ecuadorian police operation dismantled a drug trafficking network linked to the Los Lobos criminal organization, seizing more than 7 tonnes of cocaine across the Netherlands, Belgium, and Ecuador. 16 individuals were arrested including a high-value logistics coordinator. The network used banana and shrimp containers for EU-bound cocaine shipments, highlighting Ecuador's growing role in European supply chains.
New Mining & Energy Law Takes Effect -- Permits Streamlined, Indigenous Organizations Push Back
Ecuador's Organic Law for Strengthening Strategic Mining and Energy Sectors took effect on March 2, 2026, following a 77-70 National Assembly vote on February 26. The law replaces the environmental licensing system with a streamlined 'environmental authorization' regime, creates integrated mining clusters, and deploys the Armed Forces to protect strategic mining zones. Indigenous organizations have condemned the legislation as a rollback of constitutional protections.
BCE Projects 3.2% Inflation for 2026 as Diesel Subsidy Elimination Saves $1.1B Annually
The Banco Central del Ecuador projects 3.2% inflation for 2026, driven primarily by the September 2025 diesel subsidy elimination that raised prices from $1.80 to $2.80 per gallon. The move generates an estimated $1.1 billion in annual fiscal savings but triggered a 31-day national strike. The government allocated $300 million in transport operator compensation and expanded housing subsidies to 55,000 new families to cushion the impact.
CAF Signs Technical Cooperation for Ecuador's National Competitiveness Policy
CAF (Development Bank of Latin America and the Caribbean) signed a non-reimbursable technical cooperation agreement with Ecuador to develop a national competitiveness policy, announced during the II International Economic Forum and the Latin America & Caribbean 2026 Business Roundtable held in Quito. The agreement complements Ecuador's expanding trade architecture, which now includes the U.S. ART, UAE CEPA, and China FTA.
Curfew in Four Provinces Through March 31 — 75,000 Security Forces Deployed
Ecuador imposed a nightly curfew (11 PM to 5 AM) across four provinces — Guayas, Los Ríos, Santo Domingo de los Tsáchilas, and El Oro — from March 15 through March 31, 2026, deploying 75,000 security forces with armored vehicles, motorcycles, and helicopters. The affected provinces include Ecuador's commercial capital Guayaquil and key banana and shrimp export zones, raising logistics and commercial disruption risks.
World Bank: Ecuador GDP Growth at 2.0% — Below Regional Average of 2.4%
The World Bank forecasts Ecuador's GDP growth at 2.0% for 2026, below the South American average of 2.4% and well under Central America's 3.0%. The estimate converges with the IMF's 2.0% projection and CEPAL's 2.1%, while Ecuador's own Central Bank is more conservative at 1.8%. Despite record international reserves of $11.94 billion and an improving trade balance, structural constraints keep Ecuador among the region's underperformers.
NYT Investigation Challenges U.S.-Ecuador Joint Strike Claims — Dairy Farm Destroyed, Not Drug Camp
A New York Times investigation published March 24, 2026 found that a March 3 joint U.S.-Ecuador military operation in Sucumbíos province — promoted by SOUTHCOM and Defense Secretary Pete Hegseth as the destruction of a narco-terrorist training camp — actually destroyed a 350-acre dairy farm. The farm owner provided property titles and pre-destruction photographs; workers reported soldiers arriving by helicopter, setting structures on fire, and beating workers.
Ecuador's 2026 Budget: $46.3B in Spending, 13% YoY Increase
Ecuador's National Assembly approved the 2026 general state budget at $46.3 billion, a 13% increase over 2025 levels and equivalent to 33.27% of GDP. The budget assumes 1.8% real GDP growth, oil production of 165.5 million barrels at $53.50 per barrel, and allocates $2.2 billion in public investment across 388 projects.