El Salvador’s Business Boom: 1,600+ New Companies Drive Growth.

El Salvador is witnessing a remarkable economic transformation in 2023, with a surge in new business registrations and formal employment, as reported by the Central Reserve Bank (BCR). Douglas Rodríguez, the BCR’s president, shared these promising developments.

This year, over 1,600 new companies have initiated the registration process in El Salvador, reflecting a robust entrepreneurial environment. This influx of new businesses is a positive indicator of economic vitality.

One of the most striking revelations is the substantial increase in formal employment. Unlike previous years where growth hovered around 1%, El Salvador has experienced a significant 3.8% rise in formal employment. This surge is bolstering the workforce and creating new opportunities for Salvadorans.

The current government’s commitment to fostering a secure environment for business development and job creation is driving this transformation. Improved security conditions have attracted both domestic and foreign entrepreneurs, leading to the registration of thousands of new companies.

The government’s approach to security has evolved significantly. While past administrations allocated approximately 14% to 15% of the GDP to security with limited results, the current government has shifted to a more efficient and cost-effective strategy, allocating around 8% of the GDP to security measures.

“Our research shows that the government previously allocated 14% to 15% of the GDP to combat crime. Now, we see the government investing only about 8% of the GDP in security measures. Businesses always seek a favorable economic climate, and this translates to more companies and, subsequently, more jobs,” explained Rodríguez.

Additionally, El Salvador’s transition from reliance on international economies to fostering domestic growth is evident. The country’s tourism sector is booming, making El Salvador the most visited destination in the region, surpassing Costa Rica. This underscores the country’s ability to drive economic growth internally.