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El Salvador Economy: 2021 Growth Projection Jumps 50%
August 17, 2021 September 9, 2021 adminComment(0)
El Salvador's growth projection has jumped 50% since June, with the Salvadoran government now reporting that it expects the economy to grow 9% in 2021. This gives El Salvador's economy one of Latin America's strongest growth forecasts.
A map of El Salvador and its main cities
According to Douglas Rodriguez, the president of El Salvador's central bank, the main drivers of growth include industrial production, investment, household consumption, and exports.
They have made a significant improvement in the El Salvador economy's forecasts, which were only two months ago expected to grow 6% by 2021.
Based on the new 9% figure, El Salvador would be the second fastest-growing economy in Central America, after Panama, and fourth in the entire Latin America region. predictions published in July by the UN's Economic Commission for Latin America and the Caribbean (ECLAC).
SEE ALSO Essential Guide to Incorporate a Company in El Salvador
According to ECLAC, average growth for the region will hit 5.2% — highlighting the strong showing that the latest prediction represents for the El Salvador economy.
The El Salvador economy promises strong growth even in uncertain times
As countries around the world struggle to overcome the current global pandemic, the projections for El Salvador's economy have been upgraded.
The new projection was also made despite the country's current situation. recently passing a 20% minimum wage hikeIt will affect an estimated 500,000 workers in a country of less 7 million.
It also appears amid the country's pursuit of a new law that will make the cryptocurrency Bitcoin legal tender in the country — a move that has been met with mixed reactions and predictions among the international and financial community.
Yet despite all of this uncertainty, mainland Latin America's smallest country by area has shown strong signs of growth in multiple sectors of its economy.
Investors will find a country that promises growth attractive because of its potential.
Although El Salvador's economy was already expected to grow above the regional average, this new projection will make it even more attractive for investors.
Although El Salvador may not be the most well-known Latin America investment destination, it has shown great potential since 1992 when El Salvador's civil war ended.
After the end of peace talks, El Salvador's economy saw a remarkable and almost unbroken increase in gross domestic product (GDP). increased nearly five-foldBetween 1992 and 2019.
A snapshot of El Salvador's market
That has also seen prosperity rise in the country, with gross national income (GNI) — a key marker of general prosperity — hitting $4,000 per capita in 2019, to place El Salvador as an upper-middle income nation by international standards for the first time (all figures in USD).
The El Salvador economy is diverseThe services sector contributes approximately 60% to GDP, while the industry contributes 26%. Despite its small size the country has 17 different Free Trade Zones (FTZs), which offer great incentives to investors and are the location of much of the industrial base.
Notably, the El Salvador economy has continued to grow despite the fact that the country battles well-publicised levels of criminality in the country — suggesting an even brighter economic future as it grows and develops.
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