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According to ECLAC, El Salvador’s growth rate will be similar to the result in 2023, when it was around 3.5%. / Francisco Valle
The Economic Commission for Latin America and the Caribbean (ECLAC) on Tuesday raised its 2024 gross domestic product (GDP) growth forecast for El Salvador to 3.5%.
The UN agency improved the outlook announced last May, when it predicted that El Salvador’s economy would grow by 3% by the end of the year.
The trend of improving growth forecasts is in line with forecasts previously announced by the International Monetary Fund (IMF) and the World Bank (WB).
In April last year, the International Monetary Fund confirmed that it had raised its 1.9% to 3% For 2024, the World Bank announced in June that it would revise its forecast 2.5% to 3.5%.
The three international organizations are targeting growth of 3% to 3.5%. For its part, the Central Bank of the Reserve (BCR) is more optimistic and bets that GDP will be 3.5% and 4% In this year 2024.
In the area
If ECLAC’s forecasts come true, El Salvador’s economic growth will be higher than forecast for Central America, with growth of about 3.1% this year.
Nonetheless, El Salvador will rank fourth in the region by 2024. ECLAC expects Costa Rica’s economy to grow at 4%, while Honduras will grow at 3.8% and Nicaragua at 3.7%.
El Salvador’s economy will remain more dynamic than Guatemala and Panama, where growth is expected to be 3.4% and 2.7%, respectively.
ECLAC predicts that Central America will maintain a growth rate of 3.1% by 2025.
The most recent update puts El Salvador’s growth forecast at 3.1%, lower than other Central American economies.
The UN agency predicts GDP growth of 3.2% in Guatemala and Nicaragua, while Panama will grow by 3.3%.
ECLAC expects Honduras and Costa Rica to be the fastest growing countries in Central America in 2025, with growth of 3.6% and 3.8% respectively.
The multilateral organization stressed that Latin America remains “trapped” in low growth levels, which is closely related to “poor investment performance” and “low labor productivity.”
Obstacles to promoting high levels of growth are also related to the lack of internal space for countries to implement macroeconomic policies to revive their economies and global uncertainty.
The report shows that the region’s average growth rate will be about 0.9% between 2015 and 2024.
For 2024, the forecast for Latin America is about 1.8%, so that ECLAC expects a slowdown in performance after the end of 2023, with GDP growth of 2.2%.
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