El Salvador Growth Forecast Raised to 3.9 Percent by EMFI as Exports Climb
EL SALVADOR · ECONOMY
Key Facts
—What happened: London-based investment group EMFI raised its 2026 growth forecast for El Salvador from 3 percent to 3.9 percent.
—The evidence: The economy grew 4.6 percent in the first quarter, and activity kept accelerating through May.
—The real story: Construction leads, up 11.3 percent, driven by a new airport, the Acajutla port upgrade and highway works.
—The catch: The IMF and the World Bank still forecast 3.2 to 3.3 percent, so EMFI stands alone at the top.
—Who it touches: Remittances topped US$923 million in May alone, and exports reached US$4.04 billion in seven months.
—What comes next: EMFI says momentum held into the second quarter, with official mid-year data due from the central bank.
London-based investment group EMFI has lifted the El Salvador growth forecast for 2026 from 3 percent to 3.9 percent, the most optimistic institutional call of the year, as construction, exports and remittances all run strong.
What EMFI announced
The new El Salvador growth forecast comes from EMFI, a British investment group that analyses emerging-market economies and sovereign debt. It published the revision in a country report titled a good start for 2026.
The group moved its full-year estimate from 3 percent to 3.9 percent. The earlier figure had been set in March, before the first-quarter data came in.
“We have revised our growth forecast for 2026, from 3 percent to 3.9 percent,” the report states. It cites stronger domestic demand than expected and continued investment in infrastructure.
At 3.9 percent, EMFI now sits above every other institution covering the country. The conflict in the Middle East pushed most forecasters to trim their numbers this year.
The numbers behind the upgrade
The upgraded El Salvador growth forecast rests on hard data. EMFI noted that the economy expanded 4.6 percent year on year in the first quarter. The central bank, the Banco Central de Reserva or BCR, put the official reading even higher, at 4.79 percent.
The bank’s monthly activity index, known as the IVAE, rose 4.98 percent in April and 5.58 percent in May. EMFI said those high-frequency indicators suggest momentum held into the second quarter.
Investment was again the most dynamic component of demand, up 13.9 percent year on year. Private consumption grew 3.7 percent and remained the largest contributor to growth.
Public consumption expanded a more moderate 1.9 percent. That fits the government’s fiscal consolidation policy, which keeps a lid on state spending.
Remittances, the money Salvadorans abroad send home, topped US$923 million in May alone. Over the first seven months they reached US$5,924 million, although their growth is slowing month by month.
Construction leads the economy
Construction once again anchored the expansion, growing 11.3 percent year on year. It made the biggest single contribution to gross domestic product, or GDP.
Public works drive much of the activity, including the new Pacific International Airport and the expansion of the Port of Acajutla. The Los Chorros viaduct and highway widening is another flagship project.
The BCR also points to a private pipeline of housing, commercial and logistics projects worth more than US$9 billion. The National Stadium, the Metrocable cable car and the Historic Centre plan add to it.
Other sectors performed well too, EMFI said. Manufacturing grew 4.4 percent, transport and storage 7.6 percent, and hotels and food services 7.5 percent.
Exports keep climbing
Goods exports reached US$4,036.7 million between January and July, up 4.4 percent on the year. Central America remains the main destination for Salvadoran products.
At that pace, 2026 would comfortably top the roughly US$6.4 billion of exports recorded in 2025. EMFI highlighted the export performance as evidence of a solid start to the year.
Imports rose even faster, which EMFI read as a sign of strong internal demand rather than weakness. El Salvador uses the US dollar as its currency, so exporters face no exchange-rate risk at home.
How the forecast compares
The BCR officially expects growth of between 3.0 and 3.5 percent this year. The International Monetary Fund, or IMF, and the UN economic commission for the region, ECLAC, both forecast 3.3 percent.
The World Bank estimates 3.2 percent, and Moody’s sovereign credit chief Jaime Reusche put growth near 3.1 percent in June. ECLAC cut its number from 3.4 percent, citing the Middle East conflict.
That makes the El Salvador growth forecast from EMFI the highest institutional call of the year. Only the country’s own industrialists, who spoke of 4.5 percent last week, are more optimistic.
The employers’ figure came with a political agenda attached. The industrialists’ association used it to press for flexible working hours and a review of the 44-hour week.
What it means for investors and expats
For foreign readers, the message is that the expansion is broad-based. Growth is spread across construction, manufacturing, transport, commerce and hospitality rather than concentrated in one sector.
Dollarisation keeps currency risk off the table for investors. But remittances equal about a quarter of GDP, so a slowdown in that inflow touches nearly every household budget.
The open question remains the IMF programme, which still lacks a final agreement. EMFI itself flags that uncertainty in its coverage of the country.
What to watch from here
The next test for the El Salvador growth forecast is the second-quarter GDP reading from the BCR. It will show whether the momentum detected in April and May carried through the middle of the year.
Watch also the monthly remittance data, where growth has slid all year. Any further slowdown would weigh on the private consumption that drives the economy.
Finally, watch the infrastructure timetable. The Pacific airport and the Acajutla port works are the projects keeping construction in double-digit growth.
Frequently Asked Questions
Who raised the El Salvador growth forecast to 3.9 percent?
EMFI, a London-based investment group that analyses emerging-market economies and sovereign debt. It lifted its 2026 estimate from 3 percent in a country report titled a good start for 2026.
Why did EMFI raise its forecast?
The group cites stronger-than-expected domestic demand and continued infrastructure investment. First-quarter growth of 4.6 percent and rising activity indicators in April and May backed the upgrade.
What is driving growth in El Salvador in 2026?
Construction leads, up 11.3 percent year on year, powered by the Pacific International Airport, the Port of Acajutla expansion and highway works. Private consumption, supported by remittances, remains the biggest contributor.
How does EMFI’s number compare with the IMF and World Bank?
The IMF and ECLAC forecast 3.3 percent, the World Bank 3.2 percent and the central bank between 3.0 and 3.5 percent. EMFI’s 3.9 percent is the highest institutional forecast of the year.
How are El Salvador’s exports doing in 2026?
Goods exports reached US$4,036.7 million from January to July, up 4.4 percent on the year. Central America is the main destination for Salvadoran products.
Connected Coverage
We covered the seven-month export and remittance data in El Salvador exports rise as remittances lose pace. The industrialists’ 4.5 percent call appeared in El Salvador growth forecast of 4.5 percent tops official estimates.
Sources: EMFI country report on El Salvador (July 2026); Banco Central de Reserva; La Prensa Gráfica; Diario El Salvador; IMF; World Bank; ECLAC; Moody’s.
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