El Salvador has reported its lowest inflation rate in three and a half years, with the Central Reserve Bank (BCR) announcing a rate of 0.58% for September 2024. This marks a significant decline, falling below the 1.06% recorded in February 2021, and reflects a consistent downward trend in inflation attributed to effective government measures aimed at mitigating external economic impacts.

Since peaking at 7.66% in August 2022, El Salvador has experienced 19 months of continuous inflation reduction, culminating in a rate of 0.77% in March 2024. Following this, the inflation rate remained below 1.8% until the recent drop in September.

Minister of Economy María Luisa Hayem emphasized the importance of these results, especially amid global inflationary pressures. «It is very important to protect the pockets of our population and our micro and small businesses. Despite external challenges, we are seeing our inflation levels decrease,» she stated.

Key measures implemented by the government include subsidies for liquefied petroleum gas (LPG) and exemptions on tariffs for various food and agricultural products. These actions, along with targeted subsidies for gasoline, have contributed to the decrease in inflation rates.

Hayem also noted the proactive efforts of the General Directorate of Customs and the Consumer Protection Agency to ensure that price reductions are effectively passed on to consumers. «Our approach is comprehensive, utilizing all available tools to alleviate the financial burden on Salvadoran households,» she added.

In comparison to its Central American neighbors, El Salvador continues to maintain one of the lowest inflation rates in the region. As of September, it ranks second with a rate of 0.58%, following Costa Rica, which reported deflation at -0.12%. Guatemala, Honduras, and Nicaragua follow with rates of 2.11%, 3.34%, and 3.9%, respectively.

This positive economic outlook highlights El Salvador’s resilience and effective policy response in the face of global economic challenges.