Zona Rosa San Salvador. The International Monetary Fund (IMF) improved its growth projections for El Salvador’s economy and expects the country to grow 3.0% in 2024; this projection is higher than the 1.9% foreseen in October 2023.
The IMF, along with other economic organizations, has raised the country’s economic forecasts for 2024. For instance, the World Bank increased its forecast from 2.3% in June to 3.2%, and ECLAC also raised its projections in August 2024.
The IMF’s economic outlook is below the Salvadoran Central Reserve Bank’s (BCR) estimated economic growth of 3% to 3.5%.
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|
| El Salvador | -7.9 | 11.9 | 2.8 | 3.5 | 3.0 | 2.3 |
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).
Additionally, it’s lower than the 3.2% predicted by the World Bank and 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.
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|
| Costa Rica | -4.3 | 7.9 | 4.6 | 5.1 | 4.0 | 3.5 |
| Honduras | -9.0 | 12.5 | 4.0 | 3.5 | 3.6 | 3.7 |
| Guatemala | -1.8 | 8.0 | 4.1 | 3.5 | 3.5 | 3.7 |
| Nicaragua | -1.8 | 10.3 | 3.8 | 4.7 | 3.5 | 3.5 |
| El Salvador | -7.9 | 11.9 | 2.8 | 3.5 | 3.0 | 2.3 |
| Panama | -17.7 | 15.8 | 10.8 | 7.3 | 2.5 | 3.0 |
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. Central America’s projection surpasses the average of 2.0% projected for Latin America.
Costa Rica will lead Central America with an expected economic growth of 4.0% in 2024. Honduras follows with a projected economic growth of 3.6%, while Guatemala and Nicaragua are third 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 a decline to 2.5% this year.
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.
