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The international agency Fitch Ratings confirmed El Salvador’s ‘B-‘ sovereign rating with a stable outlook, a decision that reflects a balance between recent economic progress and structural challenges that still limit the country’s financial profile. The sovereign rating is a key indicator for international investors, as it measures a country’s ability to meet its debt obligations. In this case, maintaining the rating unchanged indicates that there is no immediate deterioration, but are there sufficient improvements for an upgrade in the short term.
Being in the ‘B’ range implies that El Salvador maintains a vulnerable payment capacity; that is, it can meet its commitments but is exposed to adverse economic conditions, while the ‘stable’ outlook suggests that no changes to the rating are expected soon. This represents a mixed signal: positive because it avoids a downgrade but limited because the country continues to be perceived as risky.
Among the factors supporting this rating are lower financing needs, the support of the IMF program as an anchor of fiscal discipline, macroeconomic stability stemming from dollarization, and stronger economic growth, with GDP reaching 3.9% in 2025 driven by investment (especially in construction) and consumption supported by remittances.
However, Fitch warns that significant weaknesses persist, such as high public debt close to 90% of GDP, a heavy interest burden absorbing more than 18% of government revenue, a weak external position, and past events like the 2023 pension debt swap, considered a troubled exchange, which maintains a perception of risk in the markets.
One of the key points of the report is the delay in the reviews of the IMF program, which, while not due to poor macroeconomic performance, is related to the lack of progress on structural reforms, especially in the pension system and definitions regarding the use of Bitcoin, which could affect confidence if prolonged. Pension reform is emerging as one of the biggest medium-term challenges, as a recent study reveals a significant actuarial deficit that could worsen, coupled with the fact that interest payments will resume in 2027, increasing the fiscal pressure, in a context where the electoral cycle could hinder necessary political decisions.
Regarding Bitcoin, Fitch notes that it does not pose an immediate risk to the IMF program, although the lack of clarity on the government’s strategy remains a point of concern.
On the economic front, growth is projected to moderate to 3.0% in 2026, affected by factors such as rising oil prices and potential changes in remittances, while inflation is expected to rise to 2.4%, still at controlled levels.
Fiscally, the country has shown progress with a reduction in the deficit and the generation of a primary surplus, which improves its credit profile, although risks persist if energy costs increase or subsidies are implemented.
Externally, the current account deficit continues to widen due to high imports, especially of energy, while foreign investment remains low, although international reserves have increased, providing some support.
Overall, Fitch Ratings’ decision can be considered moderately positive, as it maintains stability and reflects progress, but it makes clear that El Salvador still faces significant challenges, especially regarding debt, structural reforms, and market confidence. The future course will depend on the country’s ability to maintain fiscal discipline, advance key reforms, and strengthen its economic position.
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