According to allcitypopulation, Ecuador is located in the northwestern part of South America and has a total area of 283,561 square kilometers. It is bordered by Colombia to the north, Peru to the south and east, and the Pacific Ocean to the west. Ecuador has a diverse topography with coastal lowlands in the west, the Andes Mountains running through the center of the country, and Amazonian rainforest in the east. According to Petwithsupplies, the capital city of Ecuador is Quito with a population of 1.9 million (estimate 2019). Other major cities include Guayaquil with a population of 2.3 million, Cuenca with a population of 330,000, Santo Domingo with a population of 306,000, Machala with a population of 242,000 (2010 census).
The economy of Ecuador is largely dependent on exports such as petroleum products, bananas, shrimp, cut flowers, cocoa beans and other agricultural products. Petroleum products make up around 50 percent of total exports with other exports making up around 30 percent. The majority of imports into Ecuador are capital goods such as machinery and equipment followed by consumer goods such as food and beverages.
The government plays an important role in Ecuador’s economy with its spending on social programs aimed at reducing poverty levels increasing significantly since 2006. The government also encourages foreign investment in sectors such as oil production and mining through tax incentives. In addition to these measures it also seeks to promote economic development through infrastructure projects such as road construction, port construction and hydroelectric power plants.
Despite these efforts poverty remains a major issue in Ecuador with nearly 25 percent of its population living below the poverty line according to World Bank data from 2018. Unemployment is also high at around 9 percent while inflation stands at around 3 percent according to data from 2019.
Foreign Trade of Ecuador
Ecuador’s foreign trade is largely driven by exports of commodities such as petroleum products, bananas, shrimp, cut flowers, cocoa beans and other agricultural products. Petroleum products make up around 50 percent of total exports with other exports making up around 30 percent. The majority of imports into Ecuador are capital goods such as machinery and equipment followed by consumer goods such as food and beverages.
The United States is the largest trading partner for Ecuador with the US accounting for around 22 percent of Ecuador’s total exports in 2018. Other major trading partners include Colombia (17%), Chile (12%) and Netherlands (7%). The US is also the largest source of imports for Ecuador with the US accounting for around 20 percent of total imports in 2018. Other major sources of imports include China (18%), Colombia (9%) and Mexico (8%).
In recent years Ecuador has sought to diversify its export base by investing in manufacturing industries such as textiles and processed foods as well as services such as tourism to reduce reliance on agricultural exports. Non-traditional exports now account for nearly half of total exports in 2018.
Ecuador has also looked to increase its foreign trade with other countries through free trade agreements with countries such as Chile, Colombia, Mexico, Panama and Peru through the Andean Community trade bloc. These agreements have helped to reduce tariffs on imports from these countries while also increasing access to markets in these countries for Ecuadorian exporters.
Major Trading Partners of Ecuador
The United States is the largest trading partner for Ecuador with the US accounting for around 22 percent of Ecuador’s total exports in 2018. Other major trading partners include Colombia (17%), Chile (12%) and Netherlands (7%). The US is also the largest source of imports for Ecuador with the US accounting for around 20 percent of total imports in 2018. Other major sources of imports include China (18%), Colombia (9%) and Mexico (8%).
Colombia is one of the main trading partners for Ecuador, primarily due to its close geographic proximity. In 2017, trade between the two countries was valued at $2.4 billion, with exports from Colombia to Ecuador totaling $1.5 billion and exports from Ecuador to Colombia totaling $902 million. Major exports from Colombia to Ecuador include food and beverages, machinery, textiles and clothing while major exports from Ecuador to Colombia include petroleum products, bananas and shrimp.
Chile is another major trading partner with bilateral trade valued at $1.7 billion in 2017 with Chilean exports totaling $1 billion and Ecuadorian exports totaling around $700 million. Major Chilean exports to Ecuador include machinery, food and beverages while major Ecuadorian export products are petroleum products, bananas and shrimp.
Mexico is another important trading partner for Ecuador with bilateral trade valued at $1.2 billion in 2017 with Mexican exports totaling $830 million while Ecuadorean exports totaled around $380 million. Major Mexican export products to Ecuador are machinery, motor vehicles, electrical equipment as well as chemicals while major Ecuadorean export products are petroleum products, bananas and shrimp.
The Netherlands is another significant trading partner for Ecuador with bilateral trade valued at around $1 billion in 2017 with Dutch exports totaling around $800 million while Ecuadorean exports totaled around $200 million. Major Dutch export products to Ecuador are machinery and electrical equipment while major Ecuadorean export goods are petroleum products as well as bananas and shrimp.
Major Imports and Exports of Ecuador
Ecuador has a diversified import and export profile, with its main exports being petroleum products, bananas and shrimp. Its major imports include machinery, motor vehicles, electrical equipment, food and beverages as well as chemicals.
Petroleum products are Ecuador’s largest export commodity and accounted for 40 percent of total exports in 2018. The country is the world’s sixth-largest oil producer and its crude oil production is mainly exported to the US, China, India and Japan. In 2018 Ecuador exported over $14 billion worth of petroleum products.
Bananas are Ecuador’s second-largest export commodity and accounted for 13 percent of total exports in 2018. The country is the world’s largest producer of bananas with over 5 million metric tons produced in 2017. Ecuador primarily exports its bananas to the US, Europe and Asia with an estimated value of $2 billion in 2018.
Shrimp is another major export from Ecuador with around $1 billion worth of shrimp being exported annually to countries such as the US, Japan, Thailand and China. Shrimp accounted for 4 percent of total exports in 2018 with a majority of it being frozen shrimp which is popularly used in sushi dishes around the world.
Machinery is one of Ecuador’s main imports accounting for 18 percent of total imports in 2018 with an estimated value of over $5 billion that year. Major sources for these imports include China (42%), United States (19%) and Colombia (15%). Machinery imported by Ecuador includes industrial machines such as tractors, engines and pumps along with consumer goods such as televisions, computers and telephones.
Motor vehicles are another important import item to Ecuador accounting for 8 percent of total imports in 2018 valued at around $2 billion that year. Major sources for these imports include Colombia (21%), Mexico (17%) and United States (16%). Motor vehicles imported by Ecuador includes cars such as sedans or SUVs along with trucks or buses used primarily by businesses or transport companies within the country.
Electrical equipment is also an important import item to Ecuador accounting for 7 percent of total imports valued at around $1 billion that year. Major sources for these imports include China (41%), United States (19%)and Mexico (13%). Electrical equipment imported by Ecuador includes items such as light bulbs or batteries along with larger items like generators or motors used primarily by industry within the country.