The International Monetary Fund “IMF” Predicts El Salvador’s Economy Will Grow by 3% in 2024

By Eddie Galdamez  |  Apr 19th, 2024
IMF Economic Outlook for El SalvadorIMF Headquarters in Washington DC. Photo by

The International Monetary Fund (IMF) improved its growth projections for El Salvador and expects the country to grow 3% at the end of 2024; this projection is higher than the 1.9% predicted in October 2023.

The IMF is the second economic organization in 2024 that has increased the country’s projections. The World Bank (WB) raised its projection to 2.5% from the 2.3% it projected in January.

IMF’s El Salvador Economic Outlook
2018 2019 2020 2021 2022 2023 2024 2025
2.4 2.5 -7.9 11.9 2.8 3.5 3.0 2.3

The 2024 IMF economic prediction for El Salvador is near what the Salvadoran Central Reserve Bank (BCR) is projecting. The BCR is optimistic and expects the country’s economic growth to be between 3% and 3.5% this year.

On the other hand, it is less than the 2% estimated by the Economic Commission for Latin America and the Caribbean (ECLAC) and the 2% estimated by the World Bank.

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.

Central America Economic Outlook

The International Monetary Fund forecasts a 3.9% economic growth for the Central American region in 2024, slightly lower than the 4.2% achieved in 2023. Nonetheless, Central America’s projection surpasses the average of 2% projected for Latin America.

Costa Rica will lead Central America with an expected economic growth of 4% in 2024. Honduras follows with a projected economic growth of 3.6%, while Guatemala and Nicaragua are third with 3.5% economic growth.

As usual, El Salvador is either at the bottom or towards the bottom; this year, the country is second to last with a 3% 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 a decline to 2.5% this year, followed by a recovery to 3% in 2025.

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.