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El Salvador

El Salvador's economy in 2025 exhibits robust growth and resilience, with a projected GDP expansion of approximately 2.3% to 2.5%, surpassing the regional average despite facing global economic challenges. This growth is fueled by strong foreign direct investment (FDI) inflows—which increased by 64.8% in early 2025—export growth of around 8.8%, and expanding sectors including commerce, financial services, construction, and manufacturing. The country has benefited from significant improvements in security and investor confidence, supported by efforts to reduce fiscal deficits and stabilize public finances, even as challenges like high public debt and low productivity persist.

El Salvador's economy is dollarized, promoting monetary stability and reducing exchange rate risks. Remittances play a vital role, contributing notably to household consumption and economic stability. The construction sector has shown notable growth, alongside a buoyant tourism industry benefiting from rising visitor numbers and infrastructure improvements. Export diversification efforts focus on food products, metalworking, and plastics, with key markets in Central America and South America.

Fiscal consolidation is underway, with reductions in fiscal deficits and public debt stabilizing investor sentiment. Inflation remains subdued and near historical lows, supported by controlled monetary policies. Multilateral support, including an Extended Fund Facility from the IMF, contributes to strengthening financial stability and fiscal governance. The government has also succeeded in lowering sovereign debt spreads, signaling increased market confidence.

Despite steady progress, El Salvador still faces structural challenges, including limited access to external financing, a high poverty rate around 25%, and ongoing needs to improve productivity, governance, and social inclusion. The economy remains exposed to external risks such as trade tensions and natural disasters due to geographic vulnerabilities. However, ongoing reforms in governance, transparency, and fiscal management are expected to enhance resilience and promote long-term sustainable growth.

Overall, El Salvador in 2025 presents a dynamic and evolving economic landscape characterized by steady growth, increased investment, and expanding export sectors. Its strategic initiatives to improve business conditions, strengthen public finances, and enhance security contribute to an attractive environment for both domestic and foreign businesses seeking opportunities in Central America.

Payment methods in El Salvador: