The World Bank predicts El Salvador’s economy will grow by 2.8% in 2023

By Eddie Galdamez  |  Oct 6th, 2023
World Bank El Salvador Economic Outlook
San Salvador.

The World Bank (WB) reported in its 2023 Growth Outlook report for Latin America and the Caribbean that El Salvador’s economy will grow by 2.8% in 2023. Before this increase, the Slavdoran expected growth was 2.3%.

Despite this increase adjustment, El Salvador’s economic growth outlook remains the lowest in Central America for 2023 and 2024.

The World Bank’s projection for El Salvador is higher than that announced at the end of September by the Central Reserve Bank of El Salvador (BCR), which indicated that the economy will close the year with a 2.6% growth.

World Bank El Salvador Economic Outlook
2017 2018 2019 2020 2021 2022 2023 2024
2.3 2.4 2.5 -7.9 11.2 2.6 2.8 2.3
Source: World Bank

The multilateral bank indicated that the region has proven to be largely resilient to the various external shocks after the pandemic, which is why it projects a growth of 2.8% in the Salvadoran economy.

The World Bank’s forecast of 2.8% economic growth is almost similar to the 2.6% projected by El Salvador’s Central Reserve Bank (BCR).

But, it is higher than the 2.1% given by the Economic Commission for Latin America and the Caribbean (ECLAC) and higher than the 2.2% predicted by the International Monetary Fund IMF.

According to the Central Reserve Bank of El Salvador (BCR), the Salvadoran economy grew by 3.0% in the second quarter of 2023

The main factors that contributed to GDP growth in this period were: The rise of construction activity and its multiplier effect on related activities such as engineering and architectural professional services, as well as the production chains associated with the manufacturing of construction materials. and the increase in direct and indirect employment, added to the diversification of the energy matrix and the sustained growth of services. Central Reserve Bank of El Salvador.

El Salvador’s economic outlook presents a mix of opportunities and challenges. With the adoption of Bitcoin as legal tender and efforts to attract foreign investment, there is potential for growth.

However, addressing issues like inequality and fiscal sustainability will be crucial for long-term economic stability and prosperity.