IMF Reaches Staff-Level Agreement with El Salvador on Combined Second and Third Reviews

El Salvador’s economy continues to outperform expectations, according to the IMF mission chief for the country, who announced a staff-level agreement covering the program’s second and third reviews under the Extended Fund Facility.

The agreement still requires approval from the IMF Executive Board and completion of measures agreed in advance. IMF mission chief Torres said real GDP growth exceeded expectations in 2025 and is expected to reach 4.5% in 2026, supported by private investment and consumption, remittances, tourism, and capital flows.

The IMF linked that performance to improved security and stronger investor confidence, which it said followed the implementation of prudent macroeconomic policies. The program is also contributing to a significant reduction in poverty, alongside improvements in the efficiency of public services.

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The Salvadoran economy continues to show solid performance.

Under the agreed policies, El Salvador will deepen fiscal consolidation through careful spending and better tax administration while creating room for priority infrastructure and social spending. The primary surplus of the nonfinancial public sector is expected to rise from 2.9% of GDP this year to 3.7% in 2027. That path is consistent with the Fiscal Responsibility Law’s goal of reducing public debt to 80% of GDP by 2030.

The authorities also plan to strengthen the pension system, prepare a civil-service reform, build reserve and liquidity buffers, and improve financial-sector regulation and crisis-management frameworks. Further reforms will target transparency and governance, including the anti-money-laundering and counter-terrorist-financing framework and the publication of asset declarations by senior officials.

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Real GDP growth exceeded expectations in 2025 and is expected to reach 4.5 percent in 2026.