IMF reports better-than-anticipated growth performance in El Salvador

El Salvador’s economy is doing something that would have seemed far-fetched a few years ago: impressing the IMF. The international lender announced a staff-level agreement on September 3 covering the combined second and third reviews of the country’s 40-month Extended Fund Facility program, a deal expected to unlock roughly $140 million pending Board approval. The real headline, though, is the growth number. The IMF is projecting real GDP growth of 4.5% for El Salvador in 2026, building on a 2025 performance of 3.9% that already exceeded earlier forecasts. What’s driving the turnaround Private consumption and investment are leading the charge, supported by strong remittance flows and a tourism sector that continues to gain momentum. Security improvements have played a measurable role too. Foreign investors are more willing to deploy capital when the operating environment is stable, and the country’s crackdown on gang violence has tangibly shifted the risk calculus for businesses considering El Salvador as a destination. Construction activity has picked up alongside tourism. The Central Reserve Bank raised its own 2026 growth forecast range to 4.5% to 5%, up from an earlier projecti...