In 2025, this Central American country will be the slowest-growing in the region and will suffer an economic slowdown, apart from the trade war unleashed by the United States, its good ally. Growth is projected to be 2.2 per cent.
The figures correspond to reports issued by powerful lending agencies. On the one hand, the World Bank (WB) downgraded El Salvador’s growth projection to 2.2 per cent, putting the country at the bottom of the region.
On the other hand, the International Monetary Fund (IMF) anticipated a reduction in El Salvador’s economic projection from three to 2.4% for this year.
In addition, the Inter-American Development Bank (IDB) reports on the crisis of the agricultural sector in the country, which has lost relevance in the economy, going from representing 40% of the Gross Domestic Product (GDP) to 5% in the last 50 years.
This is a serious blow considering that advancing the economy to the levels achieved in security was a purpose outlined as the main goal of President Nayib Bukele’s second term in office.
In addition, the main partner, the United States, deports the mass of Salvadoran immigrants residing in its territory by eliminating protection agreements and expelling tens of thousands who live in the shadows and provide billions of dollars in remittances.
The crisis in agriculture, the decline in the production of basic grains, fewer livestock and the reduction of arable land are now one of the major concerns for the country, which is moving towards dependence on imports. It should also be borne in mind that the Central Reserve Bank (BCR) has so far failed to present a gross domestic product (GDP) growth projection for 2025, after 2024 closed with 2.6%, lower than the government’s predicted scenarios of between 3.5% and 4%. The IMF and WB updates come on the sidelines of the 2025 Spring Meetings in Washington, where the focus of discussions is the impact of US President Donald Trump’s tariff war, according to media reports.
Quoted in the daily El Mundo, Carlos Felipe Jaramillo, vice-president for Latin America and the Caribbean of the WB, stated that there are higher levels of uncertainty, which is why he recommended that the Latin American region urgently adopt reforms to boost competitiveness and productivity.
In the case of El Salvador, and despite policies to sell food at lower prices in some markets set up by the government, the ordinary population has recently experienced the crisis and is complaining about rises in the price of basic necessities.
Added to this are the assessments of organisations and associations such as the Salvadoran Chamber of Small and Medium Agricultural Producers Association (Asociación Cámara Salvadoreña de Pequeños y Medianos Productores Agropecuarios) (Campo), whose president, Luis Treminio, warned of the crisis in the agricultural sector. This, he said, is linked to the lack of public policies that benefit the sector.
He cited as an example the decrease in the area under cultivation of staple grains from 420,000 manzanas (9,333 caballerias) in 2021 to 295,000 manzanas (6,556 caballerias) by 2024, which will mean a lack of domestically produced staple foods and their importation from other countries.
In El Salvador, estimates indicate that more than 800,000 people will face food shortages by 2025, which could be exacerbated by El Niño and other ‘dark clouds’ that are yet to arrive. According to the Food and Agriculture Organisation of the United Nations (FAO), the food crisis may intensify from the second quarter of 2025 when food stocks run out. PL
(Translated by Cristina Popa – Email: gcpopa83@gmail.com) – Photo: Pixabay
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