Zona Rosa San Salvador. In April 2024, the International Monetary Fund (IMF) improved its growth projection for El Salvador’s economy and expected the country to grow 3.0% in 2024; this projection was higher than the 1.9% foreseen by the organization in October 2023.
Then, in October 2024, the International Monetary Fund (IMF) released its Western Regional economic outlook and maintained that the Salvadoran economy would grow by 3% in 2024; however, it improved the scenario for 2025 to a 3% growth rate.
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| El Salvador | 11.9 | 2.8 | 3.5 | 3.0 | 3.0 |
The International Monetary Fund forecast of 3.0% economic growth is at the low end of the 3% to 3.5% projected by El Salvador’s Central Reserve Bank (BCR).
Furthermore, it is 0.1 percentage points higher than the 2.9% predicted by the World Bank but lower than the 3.5 of the Economic Commission for Latin America and the Caribbean (ECLAC).
The IMF forecast that the Salvadoran economy will have the second lowest economic growth in Central America in 2024, behind Panama.
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| Costa Rica | 7.9 | 4.6 | 5.1 | 4.0 | 3.5 |
| Nicaragua | 10.3 | 3.8 | 4.6 | 4.0 | 3.8 |
| Honduras | 12.5 | 4.1 | 3.6 | 3.6 | 3.5 |
| Guatemala | 8.0 | 4.2 | 3.5 | 3.5 | 3.6 |
| El Salvador | 11.9 | 2.8 | 3.5 | 3.0 | 3.0 |
| Panama | 15.8 | 10.8 | 7.3 | 2.5 | 3.0 |
SEE ALSO: Living in El Salvador: Top Reasons for Moving to El Salvador
Central America Economic Outlook
The International Monetary Fund forecasts a 3.8% economic growth for the Central American region (CAPDR) in 2024, slightly lower than the 4.1% achieved in 2023. Central America’s projection surpasses the 2.1% projected economic growth for Latin America.
Costa Rica and Nicaragua lead Central America with an expected economic growth of 4.0% each in 2024. Honduras follows with a projected economic growth of 3.6%, and Guatemala is fourth with 3.5% economic growth. El Salvador is second to last with a 3.0% projected growth.
Panama, which boasted the highest economic growth rate last year at 7.3%, is forecasted to rank last in the region in 2024. The IMF predicts that the Panamanian economy will grow 2.5% this year.
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| Central America & the Dominican Republic | 11.1 | 5.4 | 4.1 | 3.8 | 3.8 |
| Latin America & the Caribbean | 7.4 | 4.2 | 2.2 | 2.1 | 2.5 |
The IMF underlines that risks to the global economic outlook are broadly balanced; however, price increases can arise from geopolitical tensions, including those from the war in Ukraine and the conflict in Gaza and Israel.
El Salvador remains without an agreement with the IMF, seeking a financial deal of approximately $1.3 billion. The international organization has affirmed that discussions persist with the Bukele government, focusing on crucial areas, including El Salvador’s adoption of Bitcoin as a legal currency.
