World Bank maintains economic growth outlook for El Salvador

The multilateral organization indicated that the Salvadoran economy will grow 2.8% by the end of 2023 and projects a growth of 2.3% for this year.

El Salvador continues to demonstrate that it has a solid and resilient economy to the different international economic shocks, strengths that have been positively valued in a report on Growth Prospects for Latin America and the Caribbean of the World Bank (WB), published Tuesday.

In the report, the multilateral indicated that El Salvador’s growth perspective for 2023 remains at 2.8%, 0.2 percentage points higher than the growth it indicated at the end of 2022, which was 2.6%.

Likewise, the multilateral continues projecting that the national economy will grow by 2.3 % in 2024 and 2025. “El Salvador, however, will grow at a more modest pace of 2.3 % amid slower consumption growth,” the report published on Tuesday indicates.

The economic outlook published by the World Bank is still higher than the one projected by the Central Reserve Bank (BCR), which indicated that the country will close 2023 with a growth of 2.7% and that this year this indicator is expected to be in the range of 2.5% to 3%.

Regional outlook

The World Bank indicated that in 2023, the Latin America and Caribbean region experienced a significant economic slowdown, with growth of only 2.2 %. “This slowdown occurred in the context of high inflation, tight monetary conditions, weak global trade, and adverse weather events,” the report states.

However, it projects that the outlook for the region suggests a gradual recovery, with projected growth of 2.3% in 2024 and 2.5% in 2025. “While the lingering effects of previous monetary tightening will continue to weigh on growth in the near term, their impact is expected to fade. As inflation declines, central banks are expected to lower interest rates, which will reduce barriers to increased investment,” he said.

Source: Diario El Salvador