A. M. 
El Salvador’s economy is experiencing moderate and sustained growth, driven primarily by domestic demand, but faces significant external risks. According to estimates by the Comisión Económica para América Latina y el Caribe (CEPAL), El Salvador’s Gross Domestic Product (GDP) will grow by 2.4% in 2025, slightly lower than the 2.6% recorded in 2024.
This forecast is supported by an increase in the minimum wage, greater access to credit, and a boom in tourism. However, the export sector faces a weak outlook due to the potential imposition of 10% tariffs on exports destined for the United States and a slower pace of growth among its main trading partners.
Domestic boost and external brakes for 2025
The main driving force of economic growth for 2025 will be domestic demand. Household consumption will directly benefit from the widespread 12.0% increase in the minimum wage, which took effect on june 1, 2025. This is compounded by greater access to credit and the steady flow of family remittances, which in 2024 totaled $8.48 billion (equivalent to 24.0% of GDP).
In contrast, the external sector presents the greatest challenge:
Tariff Risk: The imposition of 10% tariffs on Salvadoran exports to the United States looms as the main threat.
Declining Exports: The export sector already showed weakness in 2024, with a 0.8% drop in goods exports, and this weakness is expected to continue.
The drivers of the economy in 2024: credit and tourism
Despite extreme weather conditions and weak exports that slowed GDP in 2024, growth was sustained by key sectors:
Expanding Financial Sector: Financial activities were the fastest-growing sector in 2024, expanding by 8.4%. Total bank lending grew 6.4% year-over-year, driven by greater system liquidity.
The Construction Boom: Credit allocated to the construction sector grew the most, with 15.2% in 2024, and a notable 19.7% at the end of the first quarter of 2025.
Tourism and Services: Accommodation activities grew by 6.4%. The boom in international tourism, fueled by improved public safety, attracted 3.9 million visitors in 2024.
Financial Stability and Tax Reform
In the fiscal and financial sphere, El Salvador made significant progress that improves the risk outlook:
Agreement with the IMF: In february 2025, an Extended Facility Agreement (EFA) was signed with the IMF for $1.4 billion, with the goal of increasing the positive primary balance by 3.5% of GDP over three years.
Debt and Rating: Non-financial public sector debt (excluding pensions) stood at 57.7% of GDP at the end of 2024. Thanks to improved debt management, the country successfully returned to the bond markets and improved its risk rating, with Fitch Ratings raising its rating from CCC+ to B- in january 2025.
Low Inflation: Year-on-year inflation remained at an exceptionally low level of 0.29% in 2024, thanks to subsidies and lower international fuel prices. For 2025, inflation is expected to remain low, projected between 0.5% and 1.0%.
Mining Reactivation: In the productive sector, the Legislative Assembly reactivated mining activity with the General Metallic Mining Law, allowing the participation of private partnerships, although the State retains exclusive authorization for exploitation.
