The World Bank has upgraded its economic growth outlook for El Salvador, projecting an expansion of 3.5% in 2025 and 3% in 2026, according to its latest Global Economic Prospects report released on Tuesday. The revised figures mark an improvement over the institution’s October forecasts, which estimated growth of 2.6% for 2025 and 2.5% for 2026.

With this update, El Salvador no longer appears as the slowest-growing economy in Central America for 2025. The World Bank now projects Nicaragua to hold that position with an estimated growth rate of 3.1%, while both countries are expected to record similar growth of 3% in 2026.

Across the region, Panama is forecast to lead economic growth in 2026 with a projected rate of 4.1%, following a challenging period marked by the closure of the isthmus’ largest copper mine in late 2023 and ongoing water shortages affecting the Panama Canal. In 2025, Guatemala is expected to post growth of 3.7%, followed by Costa Rica at 3.6% and Honduras at 3.5%.

Domestic data also points to accelerating momentum in El Salvador. The Central Reserve Bank has reported that gross domestic product grew by 2.44% in the first quarter, rose to 4.12% in the second quarter, and reached 5.1% in the third quarter. Final growth figures for 2025 are expected to be released in late March, when the bank publishes its updated national accounts.