The government of El Salvador is pushing for an extension of the law aimed at combating inflation in basic goods until 2026. This legislation, born in 2022 in response to the inflation attributed to the Covid-19 pandemic and global commercial supply chain issues, has been a focal point of economic stability in the country.

Minister of Economy, María Luisa Hayem, has urged the Legislative Assembly to extend the “Special Transitory Law to Combat Inflation of Basic Commodity Prices” until March 31, 2026. According to the minister, the extension is crucial as it has positively impacted the Salvadoran population, various sectors of the country’s economy, and the overall economic landscape. In her request, she highlighted the benefits provided to productive sectors through the availability of raw materials and supplies. The request was submitted on March 12, just before noon.

The law against inflation, initially approved on March 13, 2022, eliminated the Central American import tariff on basic goods such as milk, potatoes, tomatoes, onions, among others, originally until March 31, 2023.

Since its inception, there have been several amendments to include additional essential items. In June 2022, beef was added; in March 2023, turkey meat and eggs were included; and in April 2023, pork, chicken meat, as well as squashes and bananas, were added to the tariff exemption.

According to the Central Reserve Bank (BCR), the inflation rate in the country stood at 0.8% as of February 2024. Specifically, the inflation rate for food and non-alcoholic beverages was 2.15%, the lowest since May 2021 when it was 1.15%. Since then, it peaked at 14.5% in August 2022.

The government’s move to extend this law underscores its commitment to stabilizing the economy and ensuring access to essential goods for its citizens. As the country continues to navigate economic challenges, this legislative extension is poised to provide a crucial lifeline for Salvadorans.