El Salvador Economic Forecast

El Salvador Economic Outlook

December 4, 2018

The economy has had a mixed few months in the third quarter after accelerating in the second quarter. Economic activity in July–August increased at roughly the same rate that was achieved in Q2 on average. However, inflation accelerated substantially compared to the second quarter and the merchandise trade deficit widened by over 30% year-on-year due to higher imports. Meanwhile, on 16 November, the IMF urged the government to press forward with structural reforms in order to foster private-sector-driven growth in the future.

El Salvador Economic Growth

Economic growth is expected to be stable next year. Higher remittance inflows from the United States should support private consumption, at least until the Temporary Protected Status program in the U.S. potentially ends in September 2019. However, high and volatile oil prices could weigh on the external sector’s contribution to growth. 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

20132014201520162017
Population (million)6.36.36.36.36.4
GDP per capita (USD)3,5163,5963,6713,7723,895
GDP (USD bn)22.022.623.223.924.8
Economic Growth (GDP, annual variation in %)2.42.02.42.62.3
Consumption (annual variation in %)3.30.02.11.30.7
Investment (annual variation in %)6.9-6.42.23.80.8
Unemployment Rate5.97.07.07.0-  
Fiscal Balance (% of GDP)-4.0-3.8-3.3-3.0-2.3
Public Debt (% of GDP)67.769.571.673.474.1
Money (annual variation in %)3.1-0.46.33.410.4
Inflation Rate (CPI, annual variation in %, eop)0.80.51.0-0.92.0
Inflation Rate (CPI, annual variation in %)0.81.1-0.70.61.0
Benchmark Interest Rate (%)2.853.483.643.933.53
Current Account (% of GDP)-6.9-5.3-3.2-2.1-2.0
Current Account Balance (USD bn)-1.5-1.2-0.7-0.5-0.5
Trade Balance (USD billion)-5.2-5.2-4.8-4.4-4.8
Exports (USD billion)5.55.35.55.45.8
Imports (USD billion)10.710.510.39.810.6
Exports (annual variation in %)3.4-3.93.9-1.66.3
Imports (annual variation in %)4.8-2.2-2.1-4.57.8
International Reserves (USD)2.72.72.72.93.3
External Debt (% of GDP)63.965.565.768.564.5

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