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Welcome to Grupo Spurrier

Grupo Spurrier is the leading company in the provision of strategic information on economic and political issues regarding Ecuador, which we monitor through Weekly Analysis and Análisis Semanal. We specialize in economic research, competition advice, market research, business plans, and workshops in economic scenarios and regulatory changes.

Weekly Analysis Briefs



Early fiscal data point to a revenues under expectations and uncontained current expenses, which would be a setback in the target of achieving a budgetary surplus. The situation just got worse with the budding bank crisis in the U.S.A, and Europe, which increases the possibility of a globalized recession. An immediate result was the fall in the price of oil and thus of government revenues. There are different sets of  consequences for Ecuador of the financial crisis, depending on whether the U.S. and European authorities prioritize addressing bank problems, or controlling inflation. Would  imported inflation go up or down? Would the dollar strengthen or weaken? Interest rates for local loans, up or down? Would the economy gain momentum or slow down?



Geopolitical conflicts increased after the Russian attack on Ukraine. The continuity of globalization is under challenge. Industrial policy has rarely worked, but at the present juncture the U.S. is willing to forego the benefits of international trade to ensure its national security objectives. The war in Ukraine has made it clear that Russia is no longer the strategic rival of the U.S., but China.   Ecuador has the highest average tariff among South American economies on the Pacific, 6.2%. It is followed at a distance by Colombia with 2.4%, Peru with .7% and Chile with .4% (World Bank, 2020). At the beginning of the Lasso administration, Comex approved a significant tariff reduction, since then there have only been marginal modifications. The new FTAs will help reduce the tariff burden.   Are we witnessing the end of globalization? What opportunities are opening up for Ecuador with nearshoring? Is ISD really a "stabilizing" tax or just a tax to collect? Why are import statistics announcing an economic slowdown?



The shrimp, banana and cacao businesses, grouped by Cordex, an exporters' association, warned about competitiveness loss. They insist on the urgency of completing trade liberalization, implementing an automatic drawback mechanism and the creation of incentives to producer-exporters.   Insecurity represents a growing cost for Ecuadoran exports. The contamination of containers with illicit drugs is also becoming more frequent. During 2022, cases of contaminated containers rose 400%.   Total exports expanded strongly at the beginning of 2022 (37.9% y-o-y in the first quarter and 30.6% in the second quarter). But in the third quarter the slowdown began and in the fourth quarter growth was only 7.0% (and non-oil exports stopped growing).   What is the evolution of freight costs? What will the Association Act with Ecuador recently approved by the U.S. Congress mean for trade? What opportunities are opening up with the signing of the FTAs with China and Costa Rica? How are negotiations with Canada progressing? What is the status of negotiations with South Korea, Mexico and the Pacific Alliance? What is the export projection for 2023?



The February 5 referendum and local election results have sent country risk through the roof. That closes the door on a possible placement of bonds in the international markets. More than ever, the government must be cautious with expenditures, as there is no room for errors. Behind the rise in country risk is the bondholders’ more pessimistic outlook regarding this government’s possibilities to improve economic performance, and of the next government to meet the programmed debt payments. Are they being too pessimistic? We dwell into the matter. What are the perspective of credit markets? Which imports grow, which do not? Are oil output and exports recovering? Which sectors underwent an increase in sales, which were stagnant, and which underperformed?



In this analysis we review what the international community has to say about Ecuador’s business environment. The Heritage Foundation finds progress in its Index of Economic Freedom. Although Ecuador still qualifies as a "mostly unfree" economy, it has moved up 23 slots in this index. There is also improvement in the Corruption Perceptions Index, although the country still remains among the most corrupt in Latin America.   One cause for concern is the continued decline in economic complexity according to the Harvard University indicator. Between 2007 and 2014, Ecuador dropped from 105th to 113th place. The decline continues, with data as of 2020 falling to 119th place. Reduced economic complexity is evidenced by poor export diversification and low growth potential. Ecuador also dropped in the Global Innovation Index.   What measures is the government promoting to boost competitiveness? What factors are the most critical in Ecuador to attract investment? Why is economic complexity falling? What is the situation of innovation? Is there progress in the human development index?



Comparing the 2023 results for prefects with those of 2019, Revolución Ciudadana has not significantly gained supporters , but the movement has been reunified. Pachakútik was the only one, among the large parties and movements, to have an important gain in votes. The biggest defeat was for PSC whose vote was reduced and lost the mayoralty of Guayaquil, its stronghold for 31 years.   The ruling CREO movement lost support and, in the referendum, President Lasso was defeated in all questions with an average NO vote of 55%. Despite having attractive questions for the electorate, the rejection of the government more.   What do these election results mean for governance? What are the risks that could prevent President Lasso from finishing his term? What could happen to bring former President Rafael Correa back to power in 2025? What does this new scenario mean for markets and investment?

Grupo Spurrier
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