San Salvador El Salvador. In June 2024, the World Bank increased El Salvador’s economic growth outlook from 2.3% to 3.2%. This growth projection represents an increase of 0.9% compared to the forecasts made in January.
With this modification, the World Bank has joined other international entities, such as the International Monetary Fund (IMF) and the Economic Commission for Latin America and the Caribbean (ECLAC), raising their economic projections for El Salvador.
The World Bank’s economic increase coincides with the 3% to 3.5% economic growth estimated by the Salvadoran Central Reserve Bank (BCR).
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|
| El Salvador | -7.9 | 11.9 | 2.8 | 3.5 | 3.2 | 2.7 |
The World Bank’s forecast of 3.2% economic growth is in line with the 3% to 3.5% projected by El Salvador’s Central Reserve Bank (BCR) but lower than the 3.5% expected by the Economic Commission for Latin America and the Caribbean (ECLAC).
However, the economic outlook is higher than the 3.0% predicted by the International Monetary Fund (IMF).
According to the World Bank, the Salvadoran economy will have the third lowest economic growth in Central America in 2024.
El Salvador is behind Costa Rica, Nicaragua, and Honduras but is ahead of Panama and Guatemala.
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|
| Costa Rica | -4.3 | 7.9 | 4.6 | 5.1 | 3.9 | 3.7 |
| Nicaragua | -1.8 | 10.3 | 3.8 | 4.3 | 3.7 | 3.5 |
| Honduras | -9.0 | 12.5 | 4.0 | 3.6 | 3.4 | 3.3 |
| El Salvador | -7.9 | 11.9 | 2.8 | 3.5 | 3.2 | 2.7 |
| Guatemala | -1.8 | 8.0 | 4.1 | 3.5 | 3.0 | 3.5 |
| Panama | -17.7 | 15.8 | 10.8 | 6.5 | 2.5 | 3.5 |
According to the World Bank (WB), Costa Rica is projected to have the best economic performance among Central American countries with a growth projection of 3.9%, followed by Nicaragua at 3.7%, Honduras at 3.4%, El Salvador at 3.2%, Guatemala at 3.0%, and Panama at 2.5%.
The Panamanian economy is expected to experience a significant decline from its 6.5% growth rate in 2023, the highest in Latin America, to 2.5%.
This downturn is attributed to the closure of the largest copper mining company in Central America following a Supreme Court ruling of
unconstitutionality prompted by widespread protests in October 2023.
Additionally, the crisis in the Panama Canal, often regarded as a driving force of productive activity, has further exacerbated Panama’s economic challenges.
According to the World Bank, 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.
