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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 projection of 3% to 3.5%, citing robust economic activity in the first half of 2026.
The Bitcoin question, reframed
The government has transferred operational control of its electronic wallet, the Chivo wallet, to a private operator. No public funds have been used in the accumulation of Bitcoin under the current framework.
That’s a meaningful shift from the earlier approach, where the government was actively buying Bitcoin with state resources and promoting adoption through sign-up bonuses funded by the public purse. Bitcoin remains legal tender, but the financial risk has been ring-fenced in a way that aligns with the fiscal prudence the IMF demands from borrowing nations.
What this means going forward
The $140 million disbursement, if approved by the IMF Board, provides both direct fiscal support and an indirect signal to international markets. IMF program compliance is essentially a seal of approval that other creditors and investors use as a shorthand for country risk assessment.
El Salvador’s ability to clear multiple program reviews simultaneously suggests the reform agenda is on track. The program has shown positive outcomes in public service efficiency and poverty reduction.
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