The results of the economic cycle analysis conducted by the Central Bank of Ecuador (BCE) for the first quarter of 2026 indicate that the Ecuadorian economy remained in an expansion phase, operating above its long-term trend. In addition, economic monitoring indicators suggest that this positive performance is expected to continue into the second quarter of the year.
Economic cycle analysis complements Gross Domestic Product (GDP) monitoring by identifying the different phases of economic activity (expansion and contraction), as well as the turning points that signal changes in its trajectory. To this end, the BCE employs a methodology specifically designed for a dollarized economy, based on the Composite Economic Indicators System (CEIS), which comprises two composite indicators: the Coincident Composite Indicator (CCI) and the Leading Composite Indicator (LCI).
The Coincident Composite Indicator (CCI), which reflects current economic conditions and confirms the consistency between the indicator’s performance and the recent path of economic activity, shows that the economy continues to be in an expansion phase. The main contributors to the CCI include variables such as public sector oil revenues; sales in the construction, manufacturing, and trade sectors; the volume of lending operations in the financial system; and value-added tax (VAT) collections.
Meanwhile, the Leading Composite Indicator (LCI), which seeks to anticipate changes in the economic cycle based on the information available from its components at a given point in time, continues to signal that the expansion phase is likely to persist during the second quarter of the current year. This outlook is supported by indicators such as imports of raw materials and intermediate goods for industry (excluding construction), West Texas Intermediate (WTI) crude oil prices, domestic production of refined petroleum products, the national unemployment rate, the non-oil terms of trade index, and total savings deposits. It is important to note that the predictive capacity of this indicator depends on the actual evolution of economic activity. Therefore, this signal will need to be confirmed once GDP results for the second quarter of 2026 become available.
Fluctuations in the economic cycle affect key macroeconomic variables such as GDP growth, inflation, employment, and investment. Monitoring these fluctuations is therefore essential for understanding the evolution of economic activity, identifying changes in its trajectory in a timely manner, and supporting the design of policies aimed at preserving macroeconomic stability and promoting sustainable medium-term growth.
The availability of timely, objective, and technically sound information on the economic cycle strengthens evidence-based decision-making, enhances the ability to anticipate economic scenarios, and helps reduce uncertainty among economic agents. In turn, this fosters a more stable and predictable environment for households, businesses, investors, and economic policymakers.
For further information, please visit: https://contenido.bce.fin.ec/documentos/informacioneconomica/SectorReal/ix_CoyunturaDef.html#section_CE
