San Salvador El Salvador.
The World Bank projects El Salvador’s economy will grow by 3.2% in 2026, placing the country above the expected average growth rate for Latin America and the Caribbean.
The latest forecast represents an improvement from the Bank’s previous outlook. In January, the multilateral institution had estimated that the Salvadoran economy would expand by 3% during 2026.
According to the World Bank’s updated economic outlook, its 3.2% growth forecast falls within the Central Reserve Bank’s projection of 3% to 3.5% for El Salvador in 2026.
The International Monetary Fund (IMF) and the Economic Commission for Latin America and the Caribbean (ECLAC) are slightly more optimistic, with both forecasting 3.3% economic growth for El Salvador this year.
El Salvador’s projected expansion is stronger than the outlook for Latin America and the Caribbean. The World Bank expects the regional economy to grow by only 2.1% during 2026.
Looking further ahead, the multilateral institution expects El Salvador’s economy to maintain moderate growth. The World Bank projects the country’s gross domestic product will expand by approximately 3% during 2027.
The BCR reported that El Salvador’s gross domestic product reached $36.71 billion in 2025, increasing by approximately $1.83 billion from the $34.88 billion registered during the previous year.
Economic activity remained positive throughout all four quarters of 2025. GDP increased 2.6% during the first quarter, 4% in the second, 5.2% in the third, and 3.8% during the fourth.
Looking at the different sectors of the economy, 15 of El Salvador’s 19 economic activities grew in 2025. Together, these sectors accounted for about 72.4% of the country’s total GDP value added.
Construction led the way, growing by 24.4%, followed by mining and quarrying at 8.7% and transportation at 6.1%. Financial and insurance activities also performed well, increasing by 4.5%.
Other sectors also posted solid growth. Hotels and restaurants increased by 4.1%, administrative and support services by 3.8%, professional and technical services by 3.7%, and trade by 3%, according to BCR data.
Other sectors posted more moderate increases, including real estate at 2.7%, agriculture and manufacturing at 2% each, recreation services at 1.9%, communications at 1.4%, and electricity at 0.9%.
The Central Reserve Bank attributed the economic performance partly to public and private construction investment, stronger demand for passenger and freight transportation, and a financial system that supported increased access to financing.
Tourism also contributed to economic activity during the year. El Salvador welcomed approximately 4.1 million international visitors in 2025, representing a record number of foreign tourists entering the Central American country.
Regional Growth Remains Weak
Economic growth across Latin America and the Caribbean is expected to remain slow. The World Bank projects the region will grow by 2.1% in 2026, down from an estimated 2.4% in 2025.
The outlook improves slightly for 2027, when regional growth is expected to reach 2.4%. However, geopolitical uncertainty, inflation, high debt levels, and limited government budgets could continue to hold back economic growth.
