San Salvador El Salvador.
The World Bank has raised its economic growth forecast for El Salvador, now expecting the economy to expand by 3.5% in 2025, according to its latest Global Economic Prospects report released in January 2026.
The updated projections improve on the bank’s October estimates, which had put growth at 2.5% for 2025 in its October 2025 report.
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | |
|---|---|---|---|---|---|---|---|
| El Salvador | -7.9 | 11.9 | 3.0 | 3.5 | 2.6 | 3.5 | 3.0 |
Throughout last year, the organization adjusted its estimates for El Salvador.
In January 2025, the World Bank estimated that the country would grow by 2.7%; in April, it lowered its forecast to 2.2%; last June, it maintained that the economy would grow by 2.2%, and in October, it raised that figure to 2.5%.
This year, the international entity expects El Salvador’s economy to grow by 3%.
With the revised outlook, El Salvador is no longer projected to be Central America’s slowest-growing economy in 2025.
The World Bank now expects Nicaragua to occupy that spot with growth of 3.1%, while both countries are forecast to expand at roughly 3% in 2026.
Regional Outlook and Economic Challenges
In Central America, Costa Rica is forecast to expand by 4.1% in 2025 and 3.6% in 2026, while Guatemala is estimated to have grown 4% last year and is projected to reach 3.7% this year.
Panama, meanwhile, is forecast to grow by 3.9% in 2025 and accelerate to 4.1% in 2026.
Honduras is expected to post growth of 3.8% in 2025 and 3.5% in 2026, and Nicaragua is projected at 3.1% in 2025 and 3% this year.
