San Salvador El Salvador.
The World Bank has slightly upgraded El Salvador’s economic growth outlook for 2025 to 2.5%, up from the 2.2% forecast issued in June, citing stronger regional stability.
The new report, “Entrepreneurship, Transformative for Employment and Growth,” released in October 2025, projects that El Salvador will sustain this same 2.5% expansion rate through 2024 and 2025, reflecting continued macroeconomic stability across Central America.
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | |
|---|---|---|---|---|---|---|---|
| El Salvador | -7.9 | 11.9 | 3.0 | 3.5 | 2.6 | 2.5 | 2.5 |
For comparison, Latin America and the Caribbean are expected to grow by 2.3% in 2025. Central America, however, is likely to outpace that average, led by Guatemala and Panama, both of which are forecast to expand by 3.9%.
Costa Rica (3.6%), Honduras (3.5%), and Nicaragua (3.1%) are also expected to contribute to regional momentum, according to the World Bank’s analysis.
Regional Outlook and Economic Challenges
Looking ahead to 2026, Panama and Guatemala are expected to top the Central American economic growth with increases of 4.1% and 3.7%, followed by Costa Rica (3.6%), Honduras (3.4%), and Nicaragua (3.0%). El Salvador’s growth is projected to hold steady at 2.5%.
By 2027, Panama is again forecast to lead the region, while El Salvador and Nicaragua are expected to see growth rise to 3%, maintaining a modest upward trend.
Despite the improvement, the World Bank cautioned that global financial conditions remain difficult.
Latin America and the Caribbean (LAC) continues its efforts to reignite growth and create more and better jobs, but progress remains constrained. The regional growth rate is expected to edge up slightly from 2.2 percent in 2024 to 2.3 percent in 2025 even as many individual economies face downward revisions in their projections. World Bank.
Optimism Tempered by Structural Hurdles
The World Bank anticipates Latin America will maintain moderate yet stable growth over the next three years, supported by incremental gains in investment and productivity.
In this environment, El Salvador’s steady forecast reflects resilience amid global uncertainty, as well as policy consistency that fosters investor confidence.
The report emphasizes that fostering entrepreneurship and expanding job training will be essential for sustaining growth. It also highlights the need to address infrastructure and security gaps that continue to hinder the region’s economic potential.
