CORREÍSMO TURNED THE STATE INTO ITS EMPLOYMENT AGENCY

Spending on public salaries currently represents about 35% of the General State Budget. In 2024, the expenditure reached USD 12.283 billion, making it the largest component of fiscal spending.

The sustained increase began in 2007 during the government of Rafael Correa, with the expansion of the state apparatus, creation of new institutions, and elimination of labor outsourcing.

Daniel Noboa's administration aims to reverse this trend by dismissing 5,000 employees and merging ministries and secretariats to reduce spending without compromising public services.

Former Deputy Minister of Finance, Fabián Carrillo, stated that the state structure has become an "employment agency" and that the cuts must be accompanied by technical analysis and political will.

For 2025, salary spending is projected at USD 9.7 billion, a provisional decrease compared to the previous year. The final budget proforma will be presented in August.

The largest expansion of spending occurred between 2007 and 2014, driven by oil revenues and borrowing from China. The first adjustments began in 2016 with Lenín Moreno.

During the 2020 pandemic, more drastic cuts were implemented. Budget items were eliminated, public companies were liquidated, and workdays and salaries were reduced, resulting in a drop of USD 705 million.

After a slight decrease in 2021, spending increased again due to salary raises, especially in education and security. Noboa faces the challenge of controlling this trend without affecting sensitive sectors.

Controlling salary spending will be key to fiscal sustainability. The government's plan seeks efficiency without deteriorating the quality of public service.