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The economic history of Ecuador covers the development of Ecuador's economy throughout its history, beginning with colonization by the Spanish Empire, through independence and up to the 21st century.
Colonial Ecuador relied on agriculture rather than mining that dominated the capitals of the Viceroys of Peru and Nueva Granada. The temperate climate of the Sierra was ideal for crop cultivation and the Costa became a top producer of cash crops, with Ecuador being one of the leading producers of cacao. Ecuador's post-independence economy relied on a system of peonage by natives on lands of the plantation owners. The economy remained reliant on cash crops. It was subject to fluctuations corresponding with the international market, and instability was common. By the 1950s bananas had replaced cocoa beans as Ecuador's main export crop.
After the 1950s, Ecuador's economy began experiencing a period of growth. Agriculture's importance in the economy shrunk as the manufacturing and service sector of the economy grew. The discovery of petroleum in the eastern region of the country and natural gas in the Gulf of Guayaquil brought a large growth to government revenue, and rapid economic growth. The economic growth resulted in inflation, and the external debt of the country increased by 15 times in a period of 5 years.
With the fall of oil prices in the 1980s, the economy declined with traditional agricultural products losing market. The damage caused by El Niño from 1982–83 damaged farms and infrastructure. Pressure caused by inflation and foreign credit disappearing led to a shortage of government capital. An austerity program including the devaluation of the sucre proved unpopular domestically but allowed Ecuador to negotiate debt repayment with the International Monetary Fund and receive financial aid. By 1984 the economy had largely recovered, so Ecuador withdrew from the OPEC in order to increase oil revenue. A drop in international oil prices hurt the economy which was heavily reliant on petroleum production by this point. To remedy this, president León Febres Cordero entered office promising economic deregulation. He achieved this by reducing import quota and tariffs while encouraging foreign investment. The GDP growth rate recovered, but a drop in petroleum export prices led to a fiscal deficit and the economy neared crisis.
The 1987 Ecuador earthquakes destroyed large parts of the Trans-Ecuadorian Pipeline and oil production ceased for sixth months. The economy took a heavy hit as the older agricultural industries could not make up for the lack of petroleum profits. The government raised domestic gas prices by 80% and Ecuador acquired international loans to save the ailing economy. The election of Febres Cordero's rival Rodrigo Borja brought a period of government involvement in the economy. His national economic austerity program did little to help the already declining economy and proved unpopular among the populace resulting in strikes. Borja continued with his anti-inflationary program, but implemented economic liberalization programs to reduce criticism of his policies.
In 1992 the election of Sixto Durán led to the successful implementation of a few modernization reforms. His successor Abdalá Bucaram promised populist economic reforms, but they never came to be before he was unseated by Congress. The economy deteriorated in the second half of the decade leading to a financial crisis in 1999. President Jamil Mahuad announced the implementation of the U.S dollar as Ecuador's currency leading to coup d'état and his replacement with vice-president Gustavo Noboa. Noboa successfully implemented the dollar and Ecuador negotiated a sand-by program with the IMF. Ecuador's economy was slightly boosted by the heightening of oil prices from 2000-01.