El Salvador Economy Grows 5.1% in Second Quarter as Construction Leads
ECONOMY · EL SALVADOR
Key Facts
- —The country El Salvador, Central America’s smallest country by area, has used the US dollar since 2001. Its central bank, the Central Reserve Bank (BCR), publishes national accounts each quarter.
- —What happened On Wednesday (30 September) the BCR said the economy grew 5.1% year on year in April–June 2026. That is up from 4.8% in the first quarter.
- —The numbers Second-quarter output reached US$10,060.6 million, US$926.5 million more than a year earlier (BCR, 30 Sep 2026). Construction grew 11.2%; agriculture shrank 0.9%.
- —What it means for you The result supports the BCR’s 31 August forecast of 4.5–5% growth for 2026. Firms selling to households and builders see firmer demand, while farmers face El Niño losses.
- —Still open The quarter’s current-account balance had not appeared in BCR releases by Thursday (1 October). The El Niño hit to second-half harvests is also unmeasured.
The El Salvador economy grew 5.1% year on year in the second quarter, the Central Reserve Bank (BCR) said on Wednesday (30 September). The pace was faster than the 4.8% recorded in January–March.
Output for April–June reached US$10,060.6 million, according to the bank, or US$926.5 million more than in the same quarter of 2025. Construction again led the expansion, although its growth rate slowed from the first quarter.
How fast the economy grew
A year earlier, in the second quarter of 2025, the El Salvador economy had expanded 3.92%, Diario El Mundo reported, citing the BCR. The latest figure therefore marks a clear acceleration over twelve months.
The BCR raised its full-year outlook on 31 August to a range of 4.5% to 5%. In March it had projected only 3% to 3.5%, Diario El Mundo reported at the time.
With two quarters at 4.8% and 5.1%, the first half sits inside that range. The second half would need to hold a similar pace for the forecast to stand.
Construction still leads, at a slower pace
Construction grew 11.2% in the second quarter, the fastest of any activity in the BCR’s breakdown. In the first quarter it had grown 13.66%, and through much of last year its rates exceeded 20%, Diario El Mundo noted.
The bank linked the boom to housing, commercial, tourism, logistics and public infrastructure projects. Credit for construction rose 30.9% year on year by June, and housing finance rose 65.1%.
Apparent cement consumption rose 19.9% on a year earlier, the BCR said. Quarrying, which supplies cement inputs, grew 7.9%, and professional and technical services, including engineering, grew 7.0%.
Heat, football and remittances
Electricity supply grew 8.1% as heatwaves in May and June lifted demand. Power consumption hit a record 715.8 gigawatt-hours in May, according to the bank.
The BCR said the start of the 2026 football World Cup lifted mobile data sales, restaurants and leisure. Hotels and restaurants grew 6.3%, helped by tourism, which our earlier report on the tourism-led boom examined in July.
Remittances, money sent home by Salvadorans abroad, totalled US$2,625 million in April–June, the BCR said. That equals roughly a quarter of quarterly output, a share close to the first quarter’s 26.3%.
Where the weak spots are
Only two activities shrank: agriculture, livestock, forestry and fishing fell 0.9%, and personal services fell 0.5%. Together they make up 6.4% of output, the BCR said.
Agriculture had already contracted 0.54% in the first quarter. Diario El Mundo reported that the El Niño weather pattern is causing losses in staple grains and cutting hydroelectric generation.
Lower hydro output means more thermal generation, which raises fuel import needs. The government is also preparing for the general election on 28 February 2027.
What Is Not Yet Known
The BCR’s Wednesday release covered output only and gave no second-quarter current-account figure. That balance tracks trade, income and transfers with the world, showing how far remittances offset the import bill.
It is also unclear how far El Niño will cut harvests and slow the El Salvador economy in the second half. Construction growth has slowed for two quarters, and the BCR has not said whether its 4.5–5% range assumes a further easing.
Sources: Banco Central de Reserva de El Salvador (BCR), second-quarter GDP release, 30 September 2026; Diario El Mundo, second-quarter GDP, 30 September 2026, BCR growth outlook, 31 August 2026 and remittances as a share of GDP, 23 August 2026.
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