El Salvador raises economic growth projection to 10.3% for 2021

Photo: Pete Linforth / Pixabay

The Salvadoran president, Nayib Bukele, indicated that they "have joined the small list of countries in the world that will grow in 2 digits" and that it’s "the first time in the history of El Salvador." 

The Central Reserve Bank of El Salvador (BCR for its acronym in Spanish) raised last Wednesday its economic growth projection for the end of 2021 to 10.3% from a previous 9%.

"El Salvador's GDP is growing, thanks to the strategic actions implemented by the government of President Nayib Bukele," said the president of the BCR, Douglas Rodríguez, according to publications of the financial institution on social media.

Salvadoran president, Nayib Bukele, indicated that they "enter the small list of countries in the world that will grow in 2 digits" and that it's "the first time in the history of El Salvador."

The BCR highlighted that exports up to October reached US$5.494 billion, 34% more than the approximately US$4.101 billion registered in 2020.

Imports reached $12.347 billion, for a trade deficit of $6.853 billion, approximately 60.5% more than the trade deficit of $4.270 billion registered between January and October 2020.

The financial entity also pointed out that family remittances totaled 6.142 billion in 10 months of the current year, with an increase of 29%, regarding the 4.759 billion in 2020.

In its latest global growth forecasts, published in October, the International Monetary Fund (IMF) predicted an economic expansion of 9% in El Salvador this year, boosted by the advances in the vaccination process against COVID-19, public infrastructure projects, and the recovery of its commercial partners.

The organization also pointed out that the Central American country will have to "re-evaluate" some of its economic policies in order to agree on a financial help program from the institution, faced with the economic crisis derived from the pandemic for about 1.3 billion dollars.

Although there has been "progress" in the talks, the agency's spokesperson, Gerry Rice, stated in a press conference that there are some "situations" that have occurred in recent months that force El Salvador to "re-evaluate some measures necessary to ensure inclusive growth, fiscal sustainability, and financial stability."

In mid-October, the risk rating agency Standard & Poors (S&P) revised from "stable" to "negative" El Salvador's outlook for the "financing gap in the coming years."

Source: Forbes. (2021, November 17). El Salvador eleva proyección crecimiento económico 10.3% para 2021. Forbes Centroamérica. Retrieved November 22, 2021, from https://forbescentroamerica.com/2021/11/17/el-salvador-eleva-proyeccion-de-crecimiento-economico-al-10-3-para-2021/