El Salvador: Request for Stand-By Arrangement: Staff Report; Staff Supplement and Statement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for El Salvador
IMF Staff Country Reports, February 24, 2009
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- El Salvador: Request for Stand-By Arrangement: Staff Report; Staff Supplement and Statement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for El Salvador
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Bibliographic details
- Published: February 24, 2009
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451834796.002
Summary findings
- Fiscal consolidation led to a reduction in the public debt-to-GDP ratio.
- The country experienced the highest growth rates in a decade.
- Real GDP growth is projected to slow to 3.2 percent in 2008, reflecting:
- lower growth in remittances,
- a tightening of external financing conditions,
- a decline in investment.
- Exports have remained buoyant despite weaker external demand.
- The banking system remains liquid and well capitalized, although:
- nonperforming loans have increased,
- profitability is declining.
Macroeconomic projections and drivers
- Real GDP growth projection: 3.2 percent in 2008.
- Key downside drivers cited:
- lower remittance growth,
- tighter external financing conditions,
- reduced investment.
Fiscal stance and public debt
- Fiscal consolidation is identified as having reduced the public debt-to-GDP ratio.
External sector and trade
- Exports have remained buoyant despite weaker external demand.
- External financing conditions are tightening and cited as a factor in growth slowdown.
Financial sector conditions
- Banking system: liquid and well capitalized.
- Emerging risks:
- increase in nonperforming loans,
- declining profitability in the banking sector.
El Salvador: Request for Stand-By Arrangement: Staff Report; Staff Supplement and Statement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for El Salvador