San Salvador El Salvador. SAN SALVADOR, El Salvador — The Salvadoran economy is expected to expand more than previously anticipated next year, according to the latest projections from the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).
The agency raised El Salvador’s 2025 growth outlook from 2.4% to 2.8%, signaling cautious optimism amid a still fragile global recovery.
The revised estimate, published Thursday, marks the third adjustment to ECLAC’s outlook this year.
In April, the organization predicted a 2.5% expansion for the Salvadoran economy, which it later reduced to 2.4% in August. The new projection represents a 0.4 percentage point improvement over the prior forecast.
ECLAC attributed the revision to a “less adverse international environment” than expected earlier this year.
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | |
|---|---|---|---|---|---|---|---|
| El Salvador | -7.9 | 11.2 | 2.8 | 3.5 | 2.6 | 2.8 | 2.7 |
Central America
For the region as a whole, ECLAC now expects a 2.4% expansion in 2025—slightly higher than previous forecasts.
The commission also maintained its overall growth forecast for Central America at 2.6%, noting that most economies in the subregion benefited from stronger-than-anticipated domestic demand and improved investment flows.
Despite El Salvador’s upward revision, the country continues to trail most of its Central American neighbors in economic performance.
Panama remains the fastest-growing economy in the region, with a projected 4.1% increase in gross domestic product (GDP) next year, even after a minor downward revision of 0.1 percentage points from the August estimate.
Costa Rica is forecast to grow by 3.8%, up from the previous 3.5% projection, while both Guatemala and Honduras are expected to grow by 3.7%. Nicaragua’s outlook remains unchanged at 3.1%.
For 2026, ECLAC anticipates sustained momentum in Central America, with Panama projected to expand by 4.2%, Honduras and Guatemala by 4%, Costa Rica by 3.8%, Nicaragua by 3.4%, and El Salvador by 2.7%.
The UN agency cautioned that while regional conditions are more stable than earlier this year, the external impetus for growth continues to weaken.
Persistent challenges—including lower global trade, limited fiscal space, and inflationary pressures—are expected to constrain faster expansion in smaller economies like El Salvador.
