El Salvador Economic Outlook
February 12, 2019The economy likely performed fairly well in the fourth quarter. Economic activity growth accelerated in November, driven mainly by faster growth in the construction sector and a solid rebound in the financial and insurance activities sector, while in annual terms merchandise exports recovered firmly in Q4 from the third quarter’s contraction. Moreover, family remittances were healthy, although the annual rate of expansion ebbed from Q3. On the political front, Nayib Bukele won February’s presidential elections. Bukele appears more business friendly than the outgoing FMLN leader, but the future direction of economic policy is still uncertain and a divided parliament will make comprehensive reform difficult.
El Salvador Economic GrowthGrowth should dip this year, although solid domestic demand and past structural reforms will support private-sector growth. Elevated public debt and the possible termination of the temporary protected status for Salvadorians residing in the U.S. pose downside risks. Our panelists expect GDP growth of 2.3% in 2019, which is unchanged from last month’s forecast, and 1.9% in 2020.
El Salvador Economy Data
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