Monday, 26 December 2022 01:58

BCR affirms that the salvadoran economy grew 2.2% in the third quarter of 2022

Written by Evelyn Alas

The Gross Domestic Product (GDP) for the third quarter of 2022 registered a growth of 2.2% compared to the same period of the previous year. In monetary terms, this represented an increase of US$682.8 million, bringing the GDP for the third quarter of 2022 to US$7,887.1 million.

During this period, growth was observed in 16 of the 19 economic activities included in the GDP measurement by the production approach, that is, 84% of such activities, with the highest growth being: Electricity with 12.6%, Construction (12.5%), Leisure services (10.7%), Government services (6.9%), Administrative and Support services (6.7%), Restaurants and hotels (4.5%), and Personal services with 3.5%.

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At the local level, the increase in investment and the promotion of tourism, as well as the development of electricity generation capacity, continue to have a positive impact on the economy, boosting productive activities and impacting variables such as formal employment, consumption, exports, public and private investment, among others.

Likewise, the strengthening of public safety has been a determining factor in favoring better conditions for the evolution of productive activities, attracting investment and positioning the country as an international tourist destination, with favorable effects on commerce and related services such as transportation, restaurants and hotels, among others.

The anti-inflationary measures promoted by the Government of President Nayib Bukele based on the stabilization and control of prices, mainly of mass consumption goods of imported origin such as fuels and products of the basic food basket, have managed to reduce the impact of external factors on the costs of the productive processes and, therefore, have contributed to slow down the growth of local consumer prices, allowing households to use the available income for the purchase of goods and services.

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In the measurement of GDP from the expenditure approach, an annual growth in exports of 12.6% and 11.1% in investment was observed, while private consumption increased 2.1% and public consumption had an annual variation of -2.3%, given the significant decrease in the needs for pandemic care. Meanwhile, imports registered an annual rate of 2.5%, which include intermediate goods for transformation, capital goods required for productive processes, as well as final consumer goods.

By the end of 2022, it is expected that the behavior of economic activity will continue to reflect favorable effects of public policies and measures implemented to reduce prices and boost productive sectors through investment, tourism development, international promotion of salvadoran goods and services, as well as the increase in the flow of commercial activities and services related to year-end festivities and world sporting events.

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As a result, the Banco Central maintains its economic growth projection of 2.8% for 2022, while for next year it estimates that the Salvadoran economy will grow between 2% and 3%, reflecting the impact of the slowdown in the world economy, offset by the dynamism of domestic demand that will be driven by public investment, better security conditions that favor consumption and private investment, as well as tourism, added to an inflation rate of 3.3% projected for 2023, which will also contribute to sustain household spending.

 

Translated by: A.M