Salvadoran economy grew 2.4% in the first quarter of 2022

By Eddie Galdamez  |  Jun 30th, 2022
El Salvador 2022 Economic Growth
Image by @SecPrensaSV

The Salvadoran Central Reserve Bank (BCR) reported that El Salvador’s gross domestic product (GDP) grew by 2.4% in the first quarter of 2022; it also forecasts a 2.6% economic growth by the end of 2022.

According to the BCR, the added value generated in production increased in 14 of the 19 economic activity branches of the country; they represent 74.1% of the country’s GDP.

The Salvadoran Central Bank credited the growth to factors such as the increased domestic tourism and visits from abroad, the relaxation of health requirements to enter the country, and the return to face-to-face activities in most productive sectors, among others.

The activities with the best performance and impact on economic growth in the first quarter of 2022 were: Transportation, with a growth of 10.6%, Administrative and support services (9.9%), Government Services (4.5%), Restaurants and hotels (11.6 %), Health (6.2%) and Electricity (8.7%).” Salvadoran Central Reserve Bank (BCR).

The BCR registered growth in three components of significant contribution to El Salvador’s economic dynamic: exports of goods and services grew by 10.9%, private consumption increased by 4.1%, and public consumption by 3.1%.

Douglas Rodríguez, president of the BCR, explained that despite international challenges, there was growth in the first quarter of 2022.

In 2019, the Salvadoran GDP growth rate was 2.4%; in 2020, due to the impact of the covid-19 pandemic, it fell by -8.2%; and in 2021, the country’s economy had a robust recovery of 10.3%.

The growth projection for the Salvadoran economy for 2022 is 2.6%, which is higher than the average of previous years, excluding 2020 and 2021 (The pandemic years).

The president of the BCR, Douglas Rodríguez, explained that the economic growth for the country dropped from 3.2% announced in January to 2.6%.

Rodriguez reiterated that current issues, such as world inflation, will continue to affect the dynamics of the country’s GDP in the coming months; therefore, the economic growth projection reduction.

El Salvador is not alone in making an economic growth projection reduction.

In January 2022, the CEPAL, or the Economic Commission for Latin America and the Caribbean, forecasted global growth of 4.9%; and in April, it reduced it to 3.9%

“71% of the countries have registered downward projections in their economic growth,” said President Rodriguez.

The advanced economies are the most affected in their downward revision of economic growth in 2022″ Douglas Rodríguez.