El Salvador’s economy will grow by 2.8% by the end of 2022

El Salvador has quickly overcome the challenges posed by the global context that accumulated the burden of the impacts of COVID-19, the logistics crisis and increase in freight prices, the war between Russia and Ukraine, and the consequent international inflationary scale, as considered by the president of the Central Reserve Bank (BCR), Douglas Rodríguez.

The official said that the anticipated measures implemented by the government of President Nayib Bukele allow El Salvador to maintain its growth projection of 2.8% for the end of this year, despite the global context.

“We want to highlight that the economic growth for this country projected for 2022 is 2.8% of the Gross Domestic Product (GDP),” said the official.

For Rodríguez, this rhythm is a reflection of the dynamics promoted by this government, which distances itself from past administrations in which growth averages never exceeded 2.3%, despite the absence of pandemic situations and other current effects.

 “In the last 30 years, the growth average was 2%, and despite all the economic shocks, El Salvador will grow 2.8%, and it is the first time that El Salvador is growing due to its internal strength, and to elements such as exports, the Economic Activity Volume Index (IVAE), and others that are resilient, and, in addition, all this does not move away from a recession scenario,” he said.

He added that, in addition to the anti-inflationary measures aimed at reducing the impact on the economy of families, the positive figure is also supported by the solid dynamics of exports, which present a growth of 13.9% and a persistent arrival of remittances of 3.7%, both parameters according to BCR measurements recorded up to October 2022.

In this context, Rodríguez also highlighted that the country has not only recovered the jobs it had before the impact of the pandemic but has significantly exceeded that number.

He explained that, from January to August 2019, in El Salvador, there were 860,000 formal jobs, according to data from the Salvadoran Social Security Institute (ISSS), while in the same period this year, 948,810 were reported.

“We are approaching one million formal jobs; in the history of the country, we have never had such high data. We can say that in the pandemic (January and August 2020), we dropped to 842,645 formal jobs, but until the eighth month of this year, we had 948,810, and that translates into income for families and the revitalization of private consumption,” he asserted.

Given this panorama, the headline reflected that “El Salvador has something particular, contrary to other countries where there is a social outbreak, because the governments have not taken measures, and if they did, they did so later to counteract inflation.”

He explained that, with 7.5%, the country remains the Central American nation with the lowest inflation rate in Central America and the third lowest in all of Latin America, surpassed only by Panama and Ecuador.

“We are the third economy in Latin America with the lowest inflation, this is mainly due to the measures taken by President Bukele, which not only benefit households, but also companies,” said Rodríguez.

On the other hand, the head of the state bank affirmed that all these components find a greater echo due to the new security climate that the country is experiencing, based on the actions implemented in this matter.

“President Bukele’s policies, the war against gangs, and the good results obtained from this have given El Salvador a favorable investment climate that it did not have before. In addition, we are a country that is an investment destination and also a safe tourist destination », he observed.