Bond prices for El Salvador saw a significant increase following the unveiling of the draft general budget for 2025, which promises to avoid debt for current spending obligations. This Tuesday, bonds maturing in April 2030 traded above $100, reflecting a rise of 0.74% to 1.22%. President Nayib Bukele celebrated this development on social media, highlighting the positive market response as he shared an image of the bonds’ performance from Argentina.
The 2025 draft budget totals $9.663 billion, which is $970 million less than the previous year’s approved budget but $595 million more than the modified budget of 2024. Minister of Finance Jerson Posada Molina noted that this budget is unique in decades for covering all obligations without requiring additional financing for current expenditures, which include salaries, goods and services, and interest payments. Investment projects will be funded through loans and donations.
In addition to the positive bond performance, El Salvador’s Emerging Bond Indicator (EMBI) dropped to the 5-point range for the first time since June 2021, signaling reduced investor uncertainty about the country’s financial obligations. This increase in bond prices occurs amid global tensions following missile launches from Iran towards Israel, impacting the world economy and oil prices.