Summary
World Bank Macro Poverty Outlook report for El Salvador (October 2025). Projects GDP growth of 2.5% in 2025-26, rising to 3.0% by 2027. Poverty expected to remain stable around 30%. The report documents El Salvador’s IMF Extended Fund Facility ($1.4B), fiscal consolidation measures, and economic performance including a surge in remittances.
Key Points
- GDP grew 2.6% in 2024 (down from 3.5% in 2023) due to flooding; rebounded H2 on tourism and investment.
- Q1 2025: GDP grew 2.3% year-on-year; remittances surged 17.9% year-on-year in H1 2025.
- Public debt peaked at 88.9% of GDP in 2024; expected to fall to 86.0% by 2027.
- Fiscal deficit narrowed to 4.5% of GDP in 2024; primary balance nearly closed.
- Poverty at 30.3% in 2023 (upper-middle income $8.30/day PPP); expected stable at ~30% through 2027.
- 1 in 3 Salvadorans lives below the international poverty line; rural poverty at 40.1%.
- 68% of workers in informal jobs in 2023.
- IMF Extended Fund Facility signed February 2025; sovereign spreads fell from 3,512 bps (June 2022) to 400 bps (September 2025).
- FDI recovered to 1.8% of GDP but below Central America average (3.2%).
- Current account deficit widened to 1.8% of GDP in 2024.
Newsletter Angles
- The remittance surge (17.9%) ahead of the US 2026 remittance tax — migration policy as direct threat to El Salvador’s main economic lifeline.
- The IMF deal’s terms (fiscal adjustment of 3.5% of GDP over 3 years, Bitcoin mandate removal) as a case study in international financial institution leverage over small-state monetary policy.
- Contrast between macro stabilization metrics (credit rating upgrade, falling spreads) and persistent poverty (30%) — fiscal consolidation can improve investor confidence without helping the poor.
Entities Mentioned
- El Salvador — subject of the report
- Nayib Bukele — president overseeing fiscal consolidation
- IMF — Extended Fund Facility anchor for reform program
Concepts Mentioned
- El Salvador Bitcoin Experiment — Bitcoin legal tender removal was one of the IMF conditions documented here
- Petrodollar System — remittances (24% of GDP) as the true financial lifeline, not crypto
Quotes
“According to 2023 data, one out of three Salvadorans lived below the international poverty line of USD 8.30/day.”
“Sovereign spreads fell from a peak of 3,512 basis points in June 2022 to 400 basis points in September 2025.”
Notes
World Bank data. Bitcoin is notably absent from this report’s economic analysis — it is treated as a past policy episode, not a current economic driver. The remittance dependency (24% of GDP) is the dominant monetary policy concern, not crypto.