IMF Flags Three Risks for Ecuador’s Economy in Second Half of 2026
Ecuador · ECONOMY
Key Facts
- —What happened Cáceres told a business meeting the Fund sees blackouts, insecurity and El Niño as the main risks for Ecuador through end-2026.
- —How big Passing the sixth review, expected around 15 September 2026, would unlock about US$400 million, the last disbursement of 2026.
- —The catch Ecuador missed fiscal targets at end-2025 and in January 2026 and needed waivers; compliance was restored through March.
- —Who pays Households and businesses carry the blackout risk; grid operator Cenace projects a worst-case November shortfall of 330.65 GWh.
- —What comes next The sixth review around 15 September; NOAA’s 9 July report put an 81% chance on a very strong El Niño in October-December 2026.
Blackouts, insecurity and a possible El Niño top the Fund’s list of concerns as Ecuador awaits its last disbursement of 2026.
The International Monetary Fund sees three risks for Ecuador’s economy in the second half of 2026 — power blackouts, insecurity and a potential El Niño event — its resident representative, Carlos Cáceres, told a business meeting, La Hora reported on 21 August 2026. The IMF Ecuador risks briefing came weeks before the Fund’s sixth review of Ecuador’s program, expected around 15 September 2026.
IMF Ecuador Risks: Blackouts, Insecurity and El Niño
Cáceres delivered the assessment in a verbal briefing to a business meeting, according to La Hora’s report of 21 August 2026. The three-risk framing comes from that briefing, not from a published IMF report.
The first risk is a return of power blackouts, known in Ecuador as apagones, as the dry season advances. The second is insecurity, and the third is a potential El Niño event in the last months of the year.
The warning comes as Ecuador waits for its final program disbursement of the year and manages a tight electricity supply situation.
The IMF Ecuador risks list covers both domestic conditions, such as security and power supply, and an external climate variable the government cannot control.
As resident representative, Cáceres is the Fund’s main interlocutor with the Ecuadorian authorities on the ground.
Program Back on Track After Early-Year Waivers
Ecuador missed fiscal targets set for the end of 2025 and for January 2026, and the IMF granted waivers. The government restored compliance with the program through March, according to the Fund.
The IMF’s fifth review, approved on 22 April 2026, projects real GDP growth of 2.5% in 2026, after 3.7% in 2025. It forecasts average inflation of 2.9%, an overall fiscal balance of -0.4% of GDP and public debt of 52.7% of GDP.
The waivers allowed the program to stay on track despite the missed targets, and the board approved the fifth review on 22 April 2026 after compliance was restored.
The fifth review’s forecasts give a baseline against which the three risks identified by Cáceres would play out.
The Fund estimates Ecuador has about US$200 million of fiscal space available for a climate emergency.
US$5 Billion Program Nears Its Final 2026 Test
Ecuador’s 48-month Extended Fund Facility was approved in May 2024 and augmented in July 2025, taking total access to about US$5 billion. Some US$3.7 billion has been disbursed to date.
The sixth review is expected around 15 September 2026. A pass would unlock about US$400 million, the last disbursement scheduled for this year.
The Extended Fund Facility supports Ecuador’s economic policies over 48 months from its May 2024 approval.
With US$3.7 billion already disbursed, the remaining access under the program is concentrated in its final reviews.
Each review assesses compliance with the program’s targets before the Fund’s board authorizes the release of money.
Power Grid Faces a Tight November
Grid operator Cenace, in its Plan de Operación SNI published in June 2026, projects a worst-case energy deficit of 330.65 GWh in November 2026, equivalent to about 450 MW of capacity.
The interconnection with Colombia can carry a maximum of 450 MW. Colombia suspended electricity exports to Ecuador on 22 January 2026 amid a trade dispute and resumed them on 5 August 2026 at a price of about US$0.33 per kWh.
Cenace’s June 2026 plan models the operation of the national grid, known as the SNI, through the dry season.
Ecuador imported 295.73 GWh from Colombia in December 2025 and January 2026, underlining how much the grid relies on cross-border supply during the dry months.
The 5 August 2026 resumption of Colombian exports restored a supply line that had been cut for more than six months.
A worst-case November deficit roughly equal to the full capacity of the Colombian link would leave little margin for error.
El Niño Odds Add to the IMF Ecuador Risks
The US National Oceanic and Atmospheric Administration raised the probability of a very strong El Niño in October-December 2026 to 81% in a report dated 9 July. NOAA put the chance of the event persisting through the early months of 2027 at 97%.
The 81% figure refers specifically to the probability of a ‘very strong’ event in the October-December 2026 window.
El Niño is one of the three IMF Ecuador risks flagged by Cáceres because of its potential effects on infrastructure and the power system.
With persistence odds of 97% through the early months of 2027, the effects of a very strong event could extend well beyond the end of 2026.
A severe event late in the year would arrive just as the Fund completes its final review of 2026 and the power system enters its most stressed period.
Frequently Asked Questions
What are the IMF Ecuador risks for late 2026?
Resident representative Carlos Cáceres told a business meeting the Fund sees three risks — power blackouts, insecurity and a potential El Niño event — La Hora reported on 21 August 2026.
When is Ecuador’s next IMF review?
The sixth review is expected around 15 September 2026. Approval would unlock about US$400 million, the final 2026 disbursement under the roughly US$5 billion program.
How exposed is Ecuador’s power grid?
Cenace projects a worst-case November 2026 deficit of 330.65 GWh, about 450 MW. The Colombia interconnection, the main import route, can carry at most 450 MW.
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