The Salvadoran economy grew 11.7% in the third quarter of 2021

11:26 17 de janeiro de 2022 Por Daniel Oiticica

The behavior of imports provides signs that confirm the economic recovery.

The Gross Domestic Product (GDP) registered a growth of 11.7% in the third quarter of 2021 compared to the same period of 2020, which consolidates the recovery process of the salvadoran economy after the effects derived from the COVID-19 pandemic .

In nominal terms, the GDP for the third quarter of 2021 amounted to US$ 7,114.7 million, translating into an increase of US$ 1,162.9 million compared to the third quarter of 2020. The accumulated current value of the three quarters of 2021 amounts to US$ 20,952.1 million, higher value to the US$ 17,689.1 that were registered in the same period of 2020.

Both the dynamics of productive activities and the behavior of spending contributed to the increase in GDP, giving solidity to this year's economic recovery. During the third quarter, 18 of the 19 economic activities registered an annual increase in their production, led by Transportation and storage, Public administration and defense, Accommodation and food service activities, Manufacturing industries, Other service activities, Commerce and repair of motor vehicles and motorcycles, and administrative and support service activities. In this way, services were the productive activities that most affected the results of the third quarter.

From the expenditure perspective, the largest increase was observed in exports, with a variation rate of 28.7%, followed by the 22.5% growth of investment; likewise, private and public consumption contributed to economic growth with an annual increase of 11.6% and 10.8%, respectively, which were partially offset by the 30.4% increase in imports of goods and services.

However, the behavior of imports provides signs that confirm the economic recovery, since they include products used for consumption and investment, as well as raw material used for production.

Some factors that favored the behavior of production and spending in the economy during the third quarter were: The vaccination process against COVID-19, which has allowed the gradual return to normality in the different economic activities, the increase in the household income, from both higher wages and family remittances, the increased demand for Salvadoran products by the main trading partners, the increase in domestic and foreign tourism in the country, and the development of important private investment and investment projects. public, highlighting emblematic projects such as the “El Torogoz” water treatment plant and the La Libertad Bypass, among others.

Added to this is the positive effect of other economic recovery measures implemented by the Government of President Nayib Bukele, such as the increase in the minimum wage from August 1 of this year, the attraction of foreign investment and tourism, the Territorial Control Plan to reduce the rates of violence in the country, actions to facilitate foreign trade, support for the country's productive sector through funds from the Trust for the economic recovery of salvadoran companies (FIREMPRESA), among others.

The results for the third quarter confirm the 10.3% growth forecast for the Salvadoran economy in 2021 and generate favorable prospects for growth of around 4% next year.