The Economic Commission for Latin America “ECLAC” Predicts El Salvador’s Economy Will Grow by 2% in 2024

By Eddie Galdamez  | Updated on Apr 16th, 2024
ECLAC El Salvador Economic OutlookSan Salvador, El Salvador. Image by San Salvador City Hall.

The Economic Commission for Latin America (ECLAC) predicts an economic growth of 2% for El Salvador in 2024. The projected increase was made public on ECLAC’s December 2023 Preliminary Overview of the Economies of Latin America and the Caribbean 2023.

The United Nations agency’s projection falls below the 3% to 3.5% economic growth estimated by the Salvadoran Central Reserve Bank (BCR).

According to the Economic Commission for Latin America and the Caribbean, the Salvadoran economy will have the lowest economic growth in Central America in 2024.

ECLAC’s Economic Outlook for El Salvador
2017 2018 2019 2020 2021 2022 2023 2024
2.3 2.4 2.5 -7.9 11.2 2.6 2.3 2.0

The ECLAC, based in Santiago, Chile, explained in a new report that the world economy “remains on a path of low economic growth” and that “developed countries will continue with their contractionary monetary policies,” despite falls in inflation rates.

The 2024 Economic Commission for Latin America outlook for El Salvador is lower than the 2.5% estimated by the World Bank. It is also lower than the 3% predicted by the International Monetary Fund and the 3% to 3.5% of El Salvador’s Central Reserve Bank.

According to the Economic Commission for Latin America, low economic growth is projected to continue.

ECLAC also noted that “although the inflation rate has slowed, it remains above pre-pandemic levels and outside the upper limits set by central banks, which suggests that interest rates will remain relatively high for the rest of the year.”

Furthermore, it also stated that high public debt levels will affect growth in the region. Lastly, high debt, rising domestic and external interest rates, and the decline in tax revenues resulting from lower economic growth will translate to limited fiscal space for the region.