Tuesday, 12 October 2021 23:38

IMF and BCR confirm El Salvador's 9% growth by 2021

Written by Evelyn Alas

The International Monetary Fund (IMF) confirmed today that El Salvador's economy will have an economic growth of 9% this year, which reaffirms the Banco Central de Reserva (BCR) projection made last august.

The IMF indicated that the average economic growth had been 2.5% and did not envision encouraging scenarios, now with the new projections El Salvador will be below Panama 12%. In addition, Guatemala will reach 5.5 %; Costa Rica, 3.9 %; Honduras, 4.9 % and Nicaragua, 5 % .

"With the 9% projection, El Salvador is among the countries with the highest economic growth in Central and Latin America, surpassing the regional averages of 6.7% and 6.3%, respectively",  said BCR President Douglas Rodriguez

In addition, the Superintendencia del Sistema Financiero (SSF), indicated through its Twitter account that the dynamism of the country's economy, is reflected in the growth of bank loans, which, as of october 8, 2021, reflect an inter-annual increase of US$825.1 million.

Both IMF and BCR estimates confirmed that the growth rate will reflect a recovery of El Salvador's productive capacity, adapting to the new reality generated by the pandemic and to the dynamics of internal and external markets.

The COVID-19 pandemic affected the Gross Domestic Product (GDP) of all economies in the world in 2020, to such an extent that the first IMF estimates for El Salvador, last april, were of 4.2 %. Similarly, the World Bank (WB), predicted that the country would have a 4.1% growth, but improved its estimate to 8% several days ago.

With the new IMF projections, the IMF affirms that the industrial production, the good performance of exports and the important investment of capital goods and household consumption, will be to dynamize the salvadoran economy expected for this year.

The encouraging projections come at a time when the salvadoran government has presented its 2022 budget with the emphasis on the consolidation of the economic recovery.