El Salvador: No News is Bad News

The new government in El Salvador is keeping almost the same ministerial team as the Funes administration, ensuring the continued deterioration of the economy and lack of eligibility for investment.

Thursday, May 22, 2014


Unfortunately "dedollarization" has been ruled out by the elected President Sanchez Ceren, which, as the next president lamented, implies that "you cant resort to a monetary policy." Our opinion is -on the contrary- that formal dollarization in force in El Salvador is a barrier to greater government fiscal outrages.

An article in Estrategiaynegocios.net reports that "the Sanchez Ceren cabinet reflects continuity with the outgoing government headed by his counterpart Mauricio Funes, with the ratification of four out of the 13 ministers and with the promotion of two deputy ministers to ministers, among other things. The other ministers and deputy ministers are members of the ruling Frente Farabundo Marti National Liberation Front party (FMLN) and professionals in the sectors which are "friends" of the ruling party, according to the president-elect. "

The latest Economic Situation Report by FUSADES notes that "the growth of the Salvadoran economy in the last 5 years has averaged 0.8%."

The statistics show that El Salvador has the lowest economic growth of all the countries in Central American and receives the least amount of foreign investment.

Even the U.S. Millennium Challenge program has been on hold for the last year awaiting the promised reforms to the Laws of Partnerships and Private Money Laundering, before $277 million in aid is released for the productive development of the country.

More on this topic

Government Moves Away from Business

April 2016

In El Salvador, the decision taken by the Sanchez Ceren administration not to attend the main business event in the country reveals either disinclination, inability to govern, or simple political manichaeism.


Maybe it is a persistence of visualizing the world as it was in the last century, dividing it into two antagonistic parties, capital on the one hand and labour on the other.

El Salvador: New Warning from Fitch Ratings

March 2015

According to the ratings agency the political polarization that characterizes the Legislature which will take office on May 1 could hamper the implementation of the fiscal reforms that the country needs.

From an article by Fitch Ratings:

El Salvador's New Legislature May Yield Fiscal Restraint

El Salvador: Difficulties in Attracting Investment Predicted

March 2014

Fitch Ratings says that the new government could increase intervention in the economy to the detriment of private investment and growth.

The rating agency foresees a continuation of the tensions between the government and some business organizations hindering the adoption of agreements between them that allow for growth of the economy.

Elections 2014: El Salvador and Costa Rica Go to Second Round  

February 2014

In scenarios where no candidate managed to win a direct election, the results of the first round confirmed the trends of voters to the left in both countries.

In a second round on March 9th in El Salvador and on April 6th in Costa Rica the next presidents of both nations will be chosen, after two elections ended with no candidate receiving the required majority to be declared president.

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