More than 30% of the government’s 2027 budget will be financed with new debt

Of Ecuador’s proposed $50.21 billion budget for 2027, $15.76 billion will be financed by debt. The budget, which represents a 13% increase over 2026, was submitted to the National Assembly Friday by the Ministry of Economic Development.

Public education will receive $6.7 billion in the government’s proposed 2027 budget.

The ministry said the “largest portion of the deficit” goes to debt service of previous loans. It said that new debt would be covered with loans from international credit organizations and bonds and treasury securities.

According to the government, the 2027 budget is based on projections of 2.5% GDP growth and oil prices of $66 a barrel. It calculates an inflation rate of 2.2%.

The largest 2027 budget expenditures are for subsidies, health care, education, and security. Subsidies, including those for fuel, agricultural and housing programs and contributions to various Social Security programs, total $9 billion, or 18% of the budget.

Public education receives $6.7 billion in the new budget while the public health care system receives $5.86 billion. Security forces, including the armed forces and police are allocated $5.23 billion.

The government estimates a 17.91% increase in tax collections in 2027, with $10.12 billion coming from the value added tax and $6.79 billion from income taxes. It also estimates an increase of 12.7% in revenue from oil and mining operations.