El Salvador’s Economy Thrives on Internal Sources, According to BCR.

El Salvador’s economy is experiencing a resilient growth pattern fueled by internal sources, including tourism, job creation, and energy exports, as highlighted by the President of the Central Reserve Bank (BCR), Douglas Rodríguez.

Despite facing international challenges, the country maintains a projected growth rate of 2% to 3% for the year-end 2023, thanks to the stability exhibited by the economy. For the first time in history, El Salvador’s economic stability relies on internal sources and security measures.

Rodríguez emphasized, “El Salvador is now growing from within, harnessing resources that were previously underutilized, such as tourism. In the past, people were hesitant to visit a country plagued by a daily death toll of 30 and reluctant to invest in a nation where paying extortion to gang members was a norm.”

The country is now flourishing in sectors it had not excelled in previously, notably the electric power generation, which now meets the national demand and is even being exported to other Central American countries. In comparison to the previous year, the sector has experienced a remarkable 300% growth rate.

This comes as a stark contrast to neighboring Honduras, which is facing power outages due to insufficient generation capacity caused by droughts.

On the employment front, Rodríguez highlighted a substantial increase in formal job positions, with the growth rate surpassing 4%. He remarked, “Over the past year, we have consistently seen job growth at significantly higher rates, a stark contrast to the previous era where growth barely reached 1%.”

“These internal factors are driving a higher growth rate than in years without international challenges,” added the official.

Addressing inflation concerns, Rodríguez noted the significant improvement in the country’s inflation rate, with 10 consecutive months of decline, resulting in price stability.

“For ten consecutive months, we have witnessed a decline in inflation, and we hold positive expectations that prices will continue to improve throughout the remainder of the year,” he estimated.

As of June 2023, the inflation rate stood at 3.78%, and based on current trends, it is expected to reach around 2% by the end of the year.

El Salvador’s economic resilience, driven by internal sources such as tourism, job creation, and energy exports, combined with a downward inflation trend, sets a positive trajectory for the nation’s economic stability and growth, as the country continues to overcome international challenges and make progress on its path to development.