El Niño Could Add Up to 1.85 Points to Ecuador Inflation and Raise 2027 Cost Risks

The 2026-2027 El Niño event adds a delayed inflation and infrastructure-risk variable to Ecuador's 2027 outlook.

Expreso reported that El Niño 2026-2027 is active and that a Citigroup study estimates a 40% probability the event reaches its peak at the end of the year.

The same estimate says the event could add up to 1.85 percentage points to Ecuador's inflation.

Food-Price Lag

The strongest impact on food prices would arrive two to six months after the climate event, pushing the consumer effect into 2027.

The report identified rice, green plantain and yellow corn crops on the Coast as among the first exposed categories, along with bananas planted in flood-vulnerable zones.

Yellow corn is used mainly to feed chickens, meaning higher corn costs can also affect chicken and egg prices.

Low Inflation Base

Ecuador entered the risk window from a low inflation base. According to Banco Central del Ecuador data cited by Expreso, average annual inflation closed 2025 at 0.71%, while the annual variation in December was 1.91%.

Against that baseline, an additional 1.85 percentage points would be a material cost shock.

Power-System Risk

The climate risk is not limited to food. Expreso reported that Coca Codo Sinclair, a run-of-river hydroelectric plant that contributes an important share to the national interconnected system, becomes inoperable when rivers carry excessive sediment.

David Vera of UIDE also warned that El Niño is usually followed by drought affecting Paute and the rest of the hydroelectric system.

For business planning, the combined watchlist is food costs, logistics interruptions and electricity reliability heading into 2027.

Source: Expreso