The International Monetary Fund announced a staff-level agreement on September 3 covering the combined second and third reviews of El Salvador's 40-month Extended Fund Facility program. The deal is expected to unlock approximately $140 million pending IMF Board approval.
The IMF is projecting real GDP growth of 4.5% for El Salvador in 2026, building on anticipated 2025 performance of 3.9%, which already exceeded earlier forecasts.
Economic drivers
Private consumption and investment are leading growth, supported by strong remittance flows and expanding tourism activity. Security improvements have also contributed to the turnaround, with reduced gang violence making the country a more attractive destination for foreign investors.
Construction activity has expanded alongside the tourism sector. The Central Reserve Bank raised its own 2026 growth forecast range to 4.5% to 5%, up from an earlier projection of 3% to 3.5%, citing robust economic activity in the first half of 2026.
Bitcoin and fiscal management
The government transferred operational control of its Chivo electronic wallet to a private operator. Under the current framework, no public funds have been used to accumulate Bitcoin, a shift from the earlier government-funded approach that included sign-up bonuses. Bitcoin remains legal tender in El Salvador.
Program implications
IMF program approval serves as a signal to international creditors and investors regarding country risk. El Salvador's ability to clear multiple program reviews suggests its reform agenda is progressing. The program has demonstrated positive outcomes in public service efficiency and poverty reduction.
