How did COVID-19 affect Ecuador’s leading economic sectors? Evidence from forecast-based counterfactuals

This study analyzes the impact of COVID-19 on the quarterly Gross Value Added (GVA) of five leading sectors of the Ecuadorian economy. Counterfactual scenarios are constructed using out-of-sample forecasts to simulate the trajectory that these sectors would have followed in the absence of the health crisis. Univariate time-series models, including SARIMA, ETS, and hybrid specifications, are implemented, with model selection based on predictive performance criteria (MAE, RMSE, and MAPE). The results indicate that 2020:Q2 concentrated the largest negative impacts across all sectors, with Construction (−34.71%) and Transportation and Storage (−26.10%) being the most affected. In contrast, Agriculture, Livestock, and Forestry exhibited a near-zero average net impact (−0.17%), reflecting relative resilience. Overall, the findings highlight substantial heterogeneity in the economic impact of the pandemic across sectors in Ecuador.Impact StatementThis study provides new evidence on the heterogeneous effects of the COVID-19 pandemic across Ecuador’s leading economic sectors using forecast-based counterfactuals. By comparing observed sectoral performance with estimated no-pandemic scenarios, the analysis identifies substantial differences in the magnitude and persistence of the economic disruption across sectors. The findings contribute to a better understanding of the sector-specific consequences of large external shocks in a dollarized emerging economy and provide useful evidence for the design of more targeted economic recovery and resilience policies.