The government of El Salvador rules out economic recession

The president of the Central Reserve Bank (BCR), Douglas Rodríguez, affirmed that the risk of economic recession in the country is definitively discarded since there is no indicator of a significant drop.

«Economic recession in El Salvador? That issue is definitively ruled out” said the official. “El Salvador will maintain positive variations” he reaffirmed.

In this sense, the official stressed that the main macroeconomic indicators of the country reflect growth despite the international crisis that has raised world inflation and put on alert even the main economies of the globe.

This is how the main indicator, the Gross Domestic Product (GDP), which measures the contributions of production, investment, and consumption to the generation of wealth, grew 2.4% during the first quarter of the year and, by the end of 2022, the BCR calculates that it will grow by 2.6%, which, according to Rodríguez, is higher than the growth registered in past decades despite not having gone through “significant wars or a global pandemic.”

In this context, Rodríguez affirms that 14 of the 19 economic branches that make up 74.1% of the country’s GDP have registered growth.

With 13.1%, leisure services are among the productive sectors that have shown the best performance since the recovery began in 2020. By the first quarter of 2022, services contributed three-quarters of the growth expressed above, and in addition, service exports increased by 31%.

In this sense, he highlighted that in the tourism sector, from January to March of this year, the country received 521,000 visitors. In that same period, the Salvadoran Tourism Institute (ISTU) reported that Salvadorans spent $99.7 million when visiting national attractions, which is more income for MSMEs dedicated to this sector.

“The specialized international firm ‘Forward Keys’ reported that El Salvador was the most visited Latin American country in the first quarter,” said the BCR president. Then in April, the visitor figure was 725,000.

Formal jobs, also directly linked to the macroeconomy, according to the official, until last February registered a growth of 7%, which means 60,192 additional jobs, of which 58,455 correspond to the private sector with a growth of 8.7%, detailed the BCR.

Inflation (7.5%) also reflects the “health” of the Salvadoran economy, as these data indicate that the country is the second in Central America with the lowest levels of inflation and the fifth on a Latin American scale.

Likewise, according to BCR data, exports boosted the country’s economic growth during the first quarter of 2022, with a year-on-year growth of 10.9%.

For its part, the government reported that “the decisions that President Bukele has taken to protect the lives of the population and guarantee their well-being have boosted the achievements in economic matters.”

“Thanks to the fact that the government prioritized social investment, the country is now better protected against COVID-19 than other countries and has better public security conditions.” The government said in a statement that this makes El Salvador a much more attractive destination to visit and invest in.

Additionally, the government affirms that it is absorbing the greatest impact of global inflation so that it does not reach households and that low levels of inflation contribute to maintaining domestic consumption, one of the strongest pillars of the economy.