Overview

The smallest country in Central America, El Salvador has experienced modest economic growth in recent decades, with an annual rate of 2.5 percent between 2013 and 2019. The COVID-19 pandemic had a significant negative impact on people’s lives and families’ incomes. Poverty increased between 2019 and 2020, but by 2021 it returned to a figure below the pre-pandemic one. Extreme poverty, however, is still higher than the pre-pandemic figures. 

To diversify the economy, and further reduce poverty and inequality, comprehensive reforms are needed to address inefficiencies in labor markets, enhance poor skills acquisition, particularly among women and vulnerable groups, and improve infrastructure and resilience to climate change and other potential natural disasters.

Source: World Bank