El Salvador Economic Outlook
January 15, 2019The economy lost momentum in the third quarter, as private consumption growth softened and exports contracted in annual terms. In contrast, public consumption and fixed investment growth accelerated notably. Looking to the fourth quarter, economic activity growth accelerated in October on a stronger industrial production reading. Moreover, remittances growth was solid in October and November. On the political front, polls show that Nayib Bukele, leader of the right-wing Grand Alliance for National Unity (GANA) party is the favorite to win February’s presidential elections. If the victor fails to obtain an outright majority, however, a run-off election will take place in March. In late-December, Congress approved the 2019 budget and a new debt issuance, which ought to reduce fiscal risks.
El Salvador Economic GrowthGrowth should moderate slightly this year, although solid remittance inflows from the U.S. will support private consumption. Elevated public debt, increased global borrowing costs and volatile oil prices pose downside risks. Our panelists expect GDP growth of 2.3% in 2019, which is unchanged from last month’s forecast, and 2.0% in 2020.
El Salvador Economy Data
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