Economic implications of Ecuador's external debt: Statistical analysis (1970–2024)
Keywords:
External debt, regression, economic growthAbstract
External debt plays a critical role in assessing fiscal sustainability and macroeconomic stability, particularly in economies dependent on oil revenues and external financing. This study examines the evolution of Ecuador’s external debt from 1970 to 2024 through a statistical–econometric approach that integrates descriptive analysis, linear regression models and ARIMA time-series forecasting. Official historical series from the Central Bank of Ecuador and the International Monetary Fund were used, following standardized procedures for data cleaning, temporal consistency validation, and model implementation using Excel, SPSS, and RStudio. The results reveal a structurally increasing and cyclical trajectory of external debt, driven by oil price cycles, GDP volatility, and external shocks. The debt-to-GDP ratio reached a historical maximum of 81.86% in 1989 and a minimum of 18.21% in 2012, underscoring Ecuador’s high sensitivity to macroeconomic disruptions. The regression model estimated for the 1972–1978 period exhibited a strong fit (R² = 0.997), confirming that the oil boom generated a rapid and closely linked expansion of indebtedness and economic activity. ARIMA projections indicate a stabilization of the debt-to-GDP ratio around 40% for the 2025–2030 period, although the widening confidence intervals highlight increasing uncertainty related to global financial conditions and oil price volatility. The findings demonstrate that Ecuador’s external debt dynamics are shaped by structural factors associated with the r–g differential, dependence on natural resources, and limited fiscal reaction capacity. Strengthening fiscal sustainability, diversifying financing sources, and adopting countercyclical fiscal frameworks emerge as essential measures to mitigate risks stemming from external indebtedness.
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