El Salvador: Selected Issues

July 1, 2016

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Format: Chicago

El Salvador: Selected Issues, (USA: International Monetary Fund, 2016) accessed December 26, 2024

Summary

This paper focuses on policies to raise growth; underpin fiscal sustainability while enhancing social safety nets; and strengthen financial sector stability, deepening, and inclusiveness. GDP growth averaged 2 percent during 2000–14, well below the Central American regional average of 4½ percent. While the underlying causes of the low growth are complex, a key channel through which they are evident appears to be low investment. Given the need to increase growth, revenue-raising measures should be accompanied by cuts in distortionary taxation. Stress tests suggest that financial buffers are adequate to contain most risks. The financial deepening and advancing financial inclusion could have a meaningful impact on both growth and poverty.

Subject: Expenditure, Fiscal policy, Fiscal rules, Labor, Pension spending, Pensions, Public debt

Keywords: Central America, CR, Crowding out, Employment growth, Fiscal rules, Global, ISCR, Labor market rigidity, Liquidity, Liquidity constraint, Pension spending, Pensions, Productivity shortfall, TFP, TFP growth, TFP performance

Publication Details

Pages:

84
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2016/209
Stock No:

1SLVEA2016002
ISBN:

9781498342346
ISSN:

1934-7685

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