Thursday, 06 October 2022 21:38

El Salvador's GDP to grow 2.4% in 2022 and 2.0% in 2023: World Bank

Written by Evelyn Alas

According to the World Bank, El Salvador has experienced modest economic growth in recent decades, with annual Gross Domestic Product (GDP) growth exceeding 3 percent only twice between 2000 and 2020.

In 2021, economic growth rebounded to 10.2 percent, supported by remittance-driven consumption and exports.

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The multilateral institution expressed that El Salvador's economy is expected to grow by 2.4 percent in 2022 and 2.0 percent in 2023. In addition, it added that other challenges persist for the country, such as the need to advance in reforms for fiscal sustainability.

The fiscal response to the COVID-19 crisis helped mitigate its impacts, cost about 15 percent of GDP and, together with low revenues and rigid expenditures, pushed public debt to over 90 percent of GDP.

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Th poverty increased by 4.6 percentage points between 2019 and 2020. However, estimates indicate that poverty would have increased by as much as 7.6 percentage points without the mitigation measures implemented by the Central Government.

To avoid debt overhang, the salvadoran nation requires fiscal consolidation to improve revenue mobilization and increase spending efficiency, while protecting economic recovery and people in poverty.

El inesperado protagonismo de la economía | Contenido Patrocinado |  Portafolio

Despite these challenges, the World Bank asserts that the country has great potential to drive dynamic, inclusive and resilient economic growth.

The country can continue to prioritize increased investments in human capital to foster its accumulation and strengthen the effectiveness of the social protection system.

Despite these challenges, the World Bank asserts that this country has great potential to drive dynamic, inclusive and resilient economic growth.

The country can continue to prioritize increased investments in human capital to foster its accumulation and strengthen the effectiveness of the social protection system.