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
WA-2025-31: EMPHATIC APPROVAL
July brought two major developments: the IMF’s approval of the government’s compliance with the commitments under the Letter of Intent and the increase in support for the four-year program from $4B to $5B; and the surprisingly strong performance of the economy in the first quarter. Studies by the Central Bank suggest that the economy grew 3.9% between January and May. Which sectors grew the most in the first quarter? The main driver behind the economic momentum was household consumption. What explains this higher consumption? How did remittances behave? What role did transfers to vulnerable sectors play? How did capital formation perform? Did foreign investment increase? Is this growth replicable over the rest of the year? What are the government’s structural reform commitments to improve medium-term growth prospects? In this edition we review quarterly growth for Q1 2025. Our previous growth outlook is in WA 2025#17, with the 2025 forecast. We also address the structural reform commitments outlined in the updated Letter of Intent dated July 8. The original Letter of Intent was analyzed in WA 2024#24.
WA-2025-30: FINANCIAL SYSTEM REFORMS
In the recent approval of the second review of the program, the IMF highlighted the country’s efforts to improve the financial environment. Meanwhile, the new Public Integrity Law introduced deep changes to the institutional framework: the monetary and financial policy boards were unified, the repayment terms of the government’s debt with the BCE were extended, and the forced conversion of certain cooperatives into banks was ordered, among other measures. As of June 2025, Ecuador’s financial system operates in a context of greater liquidity, driven by a record trade surplus, sustained growth in remittances, and positive net external financing. This abundance of resources has triggered a rebound in credit, especially in productive and consumer segments, although there are still lags in microcredit and housing. At the same time, interest rates are declining. Which sectors are leading the credit recovery, and which are lagging? Which credit segments have seen the largest reduction in interest rates? How has the banking system managed to increase profitability in a lower margin environment? What should we expect from international interest rates?
WA-2025-29: RECOVERING OUTPUT
As was the case with Guillermo Lasso, Daniel Noboa begins his four-year term with an ambitious program to recover the oil sector: a sharp increase in reserves and output, and a very significant influx of foreign investment. But unlike Lasso, Noboa does not start with an inexperienced team, but rather with a seasoned one, thanks to the year and a half in which they completed the previous term. Moreover, he enjoys a friendly, non-conspiratorial Assembly. What is the current output? Is the 2025 output target realistic? Which projects will go out to tender? Which operators have plans to increase output? What problems do they face and what is being done to overcome them? Which projects will go out to tender? What are the oil prospects of the Gulf of Guayaquil? In this issue, we review the current state of the upstream oil industry, updating our outlook from WA2024 #46. Oil trade is covered in our quarterly review on foreign trade (WA2025 #20) and the downstream oil industry was addressed in WA2024 #28. We review the latest oil output, hydrocarbon trade data and domestic fuel prices in our monthly review issues, the most recent being WA2025 #28.
WA-2025-28: RECOVERY
According to BCE, the economy grew 3% in Q12025. In April, sales rebounded, as did private exports and imports. Despite the drop in net oil exports, the trade surplus widened, which is reflected in the growth of bank deposits. As a result, private banks are in a position to expand credit. Adequate employment increased significantly in May. Everything points to an economic rebound. The Central Bank’s forecast of 2.8% looks feasible. The president aims to boost growth to between 3% and 4%. Which industries grew the most? Do international reserves cover bank deposits? How is country risk moving? Which export products are performing best? Why is inflation picking up? How is the dollar fluctuating against the euro and yuan due to Donald Trump’s policies? Which client segments are receiving bank credit? How much is the electricity tariff rising for major consumers? In this edition, we update our review of the economy’s performance based on indicators available as of early July. WA#23 contains the review with indicators available as of late May.
WA-2025-27: AN INCONSISTENT TARIFF SYSTEM
Compared to neighboring countries that promote trade liberalization, Ecuador maintains the highest tariff ceiling (40%), far above Chile (6%) and Peru (6%). However, as trade agreements are implemented, Ecuador’s average tariff is gradually declining. It is projected that nearly 70% of vehicle imports will be exempt from tariffs thanks to trade agreements currently in force or in the process of approval. But the remaining 30% imports come from countries without a trade agreement and will continue to face a 40% tariff, the maximum allowed. This fragmented system creates severe distortions: it affects market efficiency, contradicts WTO principles, and opens space for discretion and customs corruption. Ecuador's current vehicle tariff regime is clearly in need of reform to address these inconsistencies. What are the potential alternatives to this system, and how would they benefit both consumers and the broader market?
WA-2025-26: ORE DEPOSITS, LESS CREDIT
Since June 2024, overall liquidity in the economy has accelerated, along with deposits at cooperatives and mutualists. However, gross loan portfolios are still in negative territory. It is evident that the abundant liquidity captured by cooperatives and mutualists has not been transformed into new credit. What is going on? The reference lending rate has shown a downward trend since August. Cooperative lending rates are also falling, though at a slower pace. Despite the economy's high liquidity, cooperatives must offer higher rates than banks to attract funds, as reflected in higher deposit rates. What does this mean for earnings and lending capacity? What regulatory changes have occurred? Why is the level of problem loans high? Why do cooperatives lack sufficient provisions to cover all problem loans? Why has their earnings dropped? What is the risk rating of each cooperative? How do they score under the CAMEL methodology?