El Salvador Perspectives

Last week El Salvador and the US signed a new trade agreement .   El Salvador agreed to a number of measures designed to make it easier for US producers to get their goods into the Central American country in return for removing the 10% tariff Trump imposed in the spring of last year. One provision involved opening up access to minerals in El Salvador to the US according to  Reuters : The United States and El Salvador signed an agreement on Thursday aimed at encouraging investment in the exploration and export of critical minerals, which U.S. President Donald Trump has described as essential to economic and national security. The deal signed in Washington would allow U.S. companies to operate across the critical-minerals supply chain in El Salvador.... Bukele has highlighted the presence in El Salvador of minerals such as rhenium and silicon, recently added to an expanded U.S. list of critical minerals that guides Washington's priorities for clean energy, defense and manu...

Family remittances sent to El Salvador set a monthly record in May of almost $900 million. The flow of dollars into El Salvador from those living abroad during the first five months of the year was 16% higher than the same five month period in 2024, a very significant increase according to El Salvador's Central Reserve Bank . Remittances are already one fourth of El Salvador's economy.  The dollars earned abroad, overwhelmingly in the US, have lifted families out of poverty and are one of the chief engines of any economic growth in the country.   Economists interviewed in La Prensa Grafica pointed to Donald Trump's deportation policies as a main driver of the surge in remittances.  Families are sending money out of the US into bank accounts in El Salvador out of fear of being deported and losing access to their assets in the US. "If we look at the behavior of deposits in the financial system, they have grown enormously. The acceleration in remittance sending has oc...

The government in El Salvador is trying to address years of lackluster macroeconomic performance.  Despite all the publicity surrounding tourism growth and Bitcoin initiatives, figures released by El Salvador's Central Reserve Bank show that annual  economic growth in El Salvador for 2024  was a very modest 2.6%. Recently Salvador president Nayib Bukele posted on X a plan to infuse liquidity into the Salvadoran economy by advancing payments to medium, small and micro businesses and by paying down government debt held by Salvadoran banks. The funds come from the recently approved loan facility of the International Monetary Fund.   It is hoped that this will kickstart economic activity at the local level. Fitch Ratings described the level to which public debt has climbed during the Bukele administration: El Salvador’s public debt, which we estimate at 87.6% of GDP in 2024, is well above the ratings peer median (2024: 50.3%) and is a key sovereign rating weakness...

In 2019, when he was campaigning for the presidency, Nayib Bukele unveiled plans for a modern international airport in the department of La Union at the eastern edges of El Salvador.  He called it the "Airport of the Pacific," and claimed it would become an international airline bub.  Three years later, in 2022, the government said that Nayib Bukele  would lay the first stone  for the new airport that year.  Nothing happened that year. After three more years have passed, there has finally been a ceremony to lay the first stone.  On February 26, the government broadcast Bukele's speech as he celebrated the beginning of construction of the airport and extolled the benefits it would bring: pic.twitter.com/BlzsMcMGfq — Nayib Bukele (@nayibbukele) February 26, 2025 According to Bukele, the airport's first phase is going to have a 2.4 kilometers long runway with two boarding gates and a futuristic looking terminal.  Investment in the first phase of t...

A select group of people is getting very rich in today's El Salvador ruled by Nayib Bukele.  Using tourism development funds and tax policy measures, the Bukele government is allowing an assortment of real estate developers, crypto-investors, and the Bukele family to acquire significant real estate holdings and wealth.   Such policy measures were on display again on February 20 when El Salvador's Legislative Assembly convened without proposals on its agenda.  Then the Nuevas Ideas-controlled body voted to suspend the rules to vote on a new development loan .  Without prior sharing of the underlying documentation, the Assembly voted to approve borrowing $114 million dollars for highway and infrastructure projects for Surf City 1.  "Surf City" is the branding for tourism development along El Salvador's Pacific coast, with phase 1 rolled out from Puerto La Libertad to El Zonte, also known as "Bitcoin Beach." The area which will be benefitted by this new loa...

Recent year-end polling by the Public Opinion Institute at the University of Central America reveals that the economy is now viewed by the overwhelming majority of Salvadorans as the principal problem confronting their country.  The poll was conducted from December 5-17, 2024 involving more than 1200 persons from every department in the country. According to the poll results released by IUDOP,  76% of Salvadorans now believe the economy is the biggest problem the government must tackle, up from 70% a year ago, and 63% at the end of 2022.   As is true in many places, Salvadorans are focused on inflation, with 54% believing prices have gone up "mucho." How much do you perceive that the cost of living  has increased in El Salvador? In contrast to years before 2020, when crime and insecurity was seen by persons polled as the leading crisis or a major problem in the country, today less than 2% of Salvadorans believe that crime is the principal challenge facing the c...

A recent surge in the price of Bitcoin has increased the value of El Salvador's Bitcoin reserves and led president Nayib Bukele to say "I told you so."  The value of the country's  declared Bitcoin reserves is around $575 million.   At the same time, to obtain a loan from the International Monetary Fund (IMF), Bukele is being required to dismantle key parts of his Bitcoin law and cut back on government spending. The price of Bitcoin increased 50% after the election of Donald Trump to all-time highs above $100,000 US.  Since Bitcoin hit $100,00 on December 4, Nayib Bukele has been regularly patting himself on the back on social media:   Despite the surge in the value of Bitcoin as an investment asset held by El Salvador in its reserves. the digital asset never caught on as the form for ordinary daily cash transactions in El Salvador.  One of the major skeptics of the designation of Bitcoin as legal tender in El Salvador, and Bukele's large investm...

Salvadoran population from last 6 national census tallies This year El Salvador conducted its first national census of the population since 2007.   Thousands of census takers  went door to door to compile a statistical picture of the country.    Several results pop out.  For one, the population is smaller than the recent estimates.   Prior to the 2024 census , the population was estimated by various sources to be between 6.3 and 6.5 million people.  The actual count by the new census is 6.029 million people.  In the 2007 census , the population was 5.744 million.  Thus the population grew by just 5% or 285,000 over the last 17 years.   The reasons the population could be lower than expected include lower birth rates in the country, higher mortality rates from violence and disease, and the impact of outward migration by persons seeking safety from violence or pursuing economic sustenance. 52.8% of the population is female a...

Flooding in Olocuilta July 9 El Salvador Perspectives has been on vacation for the past month.  Here is a short summary of some of the major stories during that time. Flooding rains which impacted much of the country continue. Days of flooding rain began in mid-June over El Salvador and other parts of Central America as tropical weather systems impacted the region.  In El Salvador, at least 19 people died in floods, mudslides and other calamities due to the rain between June 14 and 19 with thousands forced to evacuate to government run shelters.  After that first week of flooding in mid-June, the country continued to be buffeted by more storms and rains.  Saturated soils meant that rainfall runoff quickly overran river banks or prompted trees to fall over.   The storms have continued in early July.   As of July 8, there were 8 government run shelters open housing 196 people.  A child drowned in flood waters over the weekend.  Beyond ...

This article was originally published at El Salvador Info under the title Minimum Wage in El Salvador in 2024: Understanding the Economic Realities of Salvadorans  and is reprinted here with permission of the author. By Eddie Galdamez Updated on Jan 29, 2024 The monthly minimum wage in El Salvador in 2024 is $365.00 for commerce, industrial, service, and sugar mill workers; $359.16 for maquila workers that manufacture textiles and clothing; $272.66 for coffee mill and sugar cane harvesting workers; and $243.46 for agriculture, fishing, and coffee harvesting workers. The last minimum wage increase occurred in August 2021 during the Nayib Bukele administration; before that, it happened in 2018, under the Salvador Sanchez Ceren presidency. In 2024, the Salvadoran minimum wage is divided into four sectors, with two specifically designated for urban areas and two for rural regions. Commerce, Services, Industry, and Sugar Mills Wages The minimum wage rate for workers in the fields of c...

February 16 is the 183rd anniversary of the founding of the University of El Salvador .  The University, known locally as either "the National" or "UES," is the oldest and only public university in El Salvador.  The UES enrolls more than 50,000 students at its central campus in San Salvador, with additional students taking classes at 3 small locations around the country.  Today, however, the university is struggling as the government fails to deliver millions in budgeted funding and usurps university facilities for other purposes.    Throughout much of its 183 years the University has had a precarious existence.  During the turbulent 1970s and the civil war of the 1980s, the school was shut down for years at a time as the military governments saw students and faculty as left-wing agitators. In 1986, the earthquake which hit San Salvador damaged much of the university infrastructure.  Following the civil war, the university gradually got back on its fe...