Monday, 22 April 2024 21:07

IMF: Inflation in El Salvador is expected to reach 1.7 points by 2024 and 2025

Written by Denis Muñoz

The International Monetary Fund, in its latest update of data regarding world inflation, places El Salvador in an inflationary decrease of 1.7 points, being the lowest in Central America.

The institution in its past reports placed the country's inflation in similar indexes to other Central American nations, in 2022 it was 7.3 points, in 2023 it was 1.2 points and for 2024 and 2025 it forecasts 1.7 points.

The IMF projects that the global inflation rate will decrease from 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025. However, there are concerns about possible price increases due to geopolitical tensions, regional conflicts such as in Ukraine and Gaza, labor shortages in some countries and high interest rates that could slow down the global economy more than expected.

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Improvements in living standards in low- and middle-income countries have stagnated, maintaining global disparities.

The medium-term outlook is affected by slower per capita GDP growth due to persistent structural impediments to attracting capital and labor to productive sectors.

The IMF suggests that looser-than-expected fiscal policy could boost economic growth in the short term but warns that further tightening could have higher costs.

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Inflation is expected to decline faster if central banks accelerate the easing of interest rates, artificial intelligence is properly harnessed, and deep structural reforms are implemented to increase productivity.

There are both positive and negative indicators that could influence economic growth and inflation.

 

Translated by: A.M