The Salvadoran economy surged ahead in 2023, recording a growth rate of 3.5%, a figure that exceeded records from previous decades and was propelled by various sectors such as tourism and construction.
In light of this, El Salvador emerged as one of the most dynamic economies in the region, boasting a growth rate surpassing that of the United States, which registered a 2.5% growth at the close of last year. This insight was provided by Carlos Acevedo, former president of the Central Reserve Bank (BCR).
“We ended last year with a 3.5% growth in the economy, one percentage point higher than that of the United States. I would think that, despite being somewhat affected by the U.S. slowdown, we will continue to grow above the North American country, something that had not happened in previous years,” affirmed the former FMLN government official.
Moreover, he pointed out that such a feat had not been previously recorded. However, he emphasized that El Salvador’s superior growth rate “is partly due to the effect of security and tourism.”
“The economy is already beginning to react to the new security environment. This is basically the explanation of why we are growing at 3.5%, which is novel and above the United States,” stated Acevedo during a morning interview.
At the same time, he indicated that “perhaps El Salvador is no longer at the bottom of the growth ladder” in the region. “We will grow slightly above Guatemala, a bit more than Nicaragua and Honduras, that is, we will be at the regional average and above four countries in the region, when we have been at the bottom for decades,” he commented.
The economist also highlighted that the boost in the construction sector, with an 18% increase, allowed for a rebound in the Salvadoran GDP, but he also emphasized the arrival of 3.4 million foreign visitors. Additionally, he affirmed that foreign direct investment “picked up” and totaled $760 million.
For 2024, the BCR estimated that the Salvadoran economy will grow between 3% and 3.5%, primarily driven by private and public investment, tourism, in an environment of security and certainty for the population and businesses, as well as the recovery of external demand, which will benefit exports.
In Acevedo’s opinion, the growth trend for this year will be similar to that recorded in 2023.
“I would think so, it would be 3.5%, and if economic recovery is consolidated, we should aim for 4%. Considering last year’s 3.5%, it’s not too idealistic to think of 4% because security is creating a different environment for businesses. El Salvador should set that goal as a minimum,” he asserted.