The looming impeachment trial of Ecuador’s president Guillermo Lasso marks a further intensification of the country’s political crisis and suggests that the recent experiment with market-friendly governments is on borrowed time. There are lots of ways in which things could play out, but one likely consequence is a shift away from the fiscal austerity of recent years, which could quickly put the public debt trajectory back onto an upwards path. While the sovereign’s external debt repayments look manageable for the next few years, it looks increasingly likely that the government won’t be able to honour its obligations once debt repayments ramp up from 2026.
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