Ecuador’s economy is among the most vulnerable in Latin America to the impact of El Niño, World Bank warns
Ecuador is among the countries in Latin America facing the greatest economic losses from the El Niño, according to a report by the World Bank. The Economic Outlook for Latin America and the Caribbean Report predicts that Paraguay and Argentina could also suffer heavy losses although not as extensive as those of Ecuador.
The World Bank warns that Ecuador’s electric power generation is vulnerable to the effects of El Niño.
“Ecuador is in an unfortunately unique position as El Niño forms and intensified off its equatorial coast,” the report said. “The projections indicate the country could suffer both extreme flooding in its coastal and Amazon regions and drought in the highlands,” the report said. “Flooding is already occurring and is expected to continue into January and February 2027.”
The World Bank says all sectors of Ecuador’s economy are vulnerable to the impact of El Niño, noting that production of the industrial and mining sector is already affected by electrical blackouts. “The government announced in late September that the country’s 180 largest businesses will experience disconnections from the power grid for as much as three days a week, the report said.
It added that more than 8,000 medium-sized companies are also subject to power disconnections.
The report criticized the government for not adding permanent power generation capacity following a 2024 drought that resulted in electrical blackouts of as much as 14 hours a day for a three-month period. “As electricity demands have increased by almost 25%, the country continues to rely on hydroelectric generation for 75% of its power,” the Bank says.
The report also warns of agricultural losses due to flooding in the coastal region. “Crops such as rice, sugarcane, pineapple and cocoa are vulnerable to flooding and losses are already being reported,” it said. In addition, shrimp farming and the seafood industry are also vulnerable to weather conditions.
