Self-made millionaire Guillermo Lasso may have pulled off a major surprise by winning Ecuador’s presidential election, but he faces huge challenges in governing a nation riven by political division, impoverished by a broken economy and devastated by coronavirus.

After Lasso, a former banker, achieved his surprise win on Sunday evening, thousands of his supporters poured on to the streets of upmarket neighbourhoods of Quito to celebrate.

“We’ve been waiting years for this,” said Janeth Jiménez, shouting above the din of car horns as she waved a huge flag emblazoned with Lasso’s name and face. “Hopefully with this victory we can finally pull our country out of the mud and turn it into what it should be — a normal, prosperous nation.”

But once the celebrations have ended and Lasso has entered the Carondelet Palace, the whitewashed colonial-era seat of government in Quito’s old town, the magnitude of his task will become clear.

Patrick Esteruelas, head of research at Emso Asset Management in New York, described Lasso’s governability challenges as “titanic”.

First, the coronavirus pandemic. Ecuador has suffered the world’s second worst rate of excess deaths since the health emergency began, according to a Financial Times analysis. The response has been chaotic: there have been five health ministers in the past year.

Lasso said his government will oversee the vaccination of 9m people, more than half the population, in his first 100 days. It is a highly ambitious goal for a country that so far has inoculated only 1.6 per cent of its inhabitants in two months, one of the lowest rates in Latin America.

“I don’t think they’ll hit that target and when they don’t their failure will be used against them,” said Sofía Cordero, a political scientist at Quito’s Institute of National Higher Studies.

The economy was in trouble even before coronavirus. It contracted nearly 8 per cent last year and the central bank forecasts a recovery of only 3.1 per cent this year. Debt has jumped to about 65 per cent of gross domestic product and the fiscal deficit has widened. Last year Ecuador agreed a $6.5bn lending programme with the IMF but as the pandemic hit, found it could not meet the requirements.

“It will be a tall order for the new president to put Ecuador’s public debt on a sustainable path,” London-based Capital Economics noted. “Our best guess is that the new government will pursue more moderate fiscal austerity.”

Nevertheless, the fund will be relieved Lasso won. “With Lasso, the continuation of the IMF programme is likely to be easier,” Citibank said. “Lasso will have a stronger focus on a pro-investment and growth agenda.”

Ecuador’s bonds rallied on news of Sunday’s victory. “Lasso’s more orthodox ideology and his desire to continue to work with the IMF are the two main things that are driving the rally,” said Shamaila Khan, head of emerging market debt strategies at AllianceBernstein in New York.

Politically too, Lasso faces an uphill struggle. His CREO party will be the smallest of the five main parties in Ecuador’s 137-seat congress with just 12 seats. Even when the 19 seats of his Social Christian allies are added, he is a long way from a parliamentary majority.

He must therefore negotiate with Pachakutik, Ecuador’s main indigenous party, and the Democratic Left, the second and third biggest blocs in congress. Neither is a natural partner for Lasso, a social conservative and former banker.

“The issue of governability is worrying,” said Angélica Abad, political scientist at the University of Cuenca in southern Ecuador. “Ecuador has a history of so-called ‘ghost alliances’ that fall apart almost as soon as they’ve been formed.”

Those who know Lasso said he is an adept dealmaker but acknowledged he will struggle to keep disparate allies on board. In speeches on election day, Lasso made special mention of LGBT campaigners and single mothers, saying they would find protection under his inclusive, tolerant administration. Critics point to his membership of the conservative Catholic institution Opus Dei as an indication that these pledges may not be kept.

Lasso’s triumph nonetheless shows a clear rejection by voters of Rafael Correa, the country’s former president. He had hoped that a victory for his handpicked candidate, Andrés Arauz, would pave the way for his eventual return to Ecuador.

Instead, Correa is likely to spend more years abroad as a fugitive: he lives in Belgium and will be imprisoned if he returns home, having been found guilty in absentia last year of corruption and sentenced to eight years in jail.

During Correa’s 2007-17 presidency, Ecuadorean government officials received $33.5m in bribes from the Brazilian construction giant Odebrecht, according to a document filed by US prosecutors in a separate case.

In an uncharacteristically conciliatory tweet, Correa accepted defeat and wished Lasso good luck. “We honestly believed we were winning but our projections were wrong,” he said.

However, he also suggested his own political career was not over. “This is not the end but a start,” he said.

Additional reporting by Colby Smith in New York