The government of Nayib Bukele has acquired more and more debt with the help of the official Assembly and in the year that has just ended it exceeded that of 2021.
Most of the money that is produced in El Salvador is already owed and every year that debt that all Salvadorans will have to pay through the taxes that the government collects increases more.
Official data from the Ministry of Finance show that present and future generations will have to bear this responsibility for many, many years.
The current government has been characterized by increasing the country’s indebtedness and has reached record figures in the more than three years it has been in power, far surpassing previous governments.
This year it exceeded the debt of all of 2021 in just eight months.
YOU CAN READ: Deputies close 2022 with $3,843.2 million in debt
According to the Treasury’s fiscal transparency portal, up to August 2022 (which are the data available to date) $23,990.3 million were owed, which represents 75.4% of the Gross Domestic Product (GDP). That is as if the government had acquired debt for $2,998 million each month.
And it means, as some economists have explained, that $0.75 is owed for every $1 that has been produced, at least until August. But if it is compared with the data for 2021, the debt at the end of 2022 could be even higher.
In the 12 months of 2021, the indebtedness reached $23,263.8 million, which covers 83.5% of GDP or the equivalent of $0.83 of every $1 produced, indicate the Treasury figures.
The difference between what the government indebted the country in 2021 and in eight months of 2022 is $726.5 million more.
FURTHERMORE: “It is not a worrying debt,” says the Minister of Finance before indebtedness of more than $21,000 million
But the Minister of Finance, Alejandro Zelaya, has shown himself unconcerned about the debt that El Salvador has reached. On November 9, 2022, he expressed during a television interview that the country would close the year with a public debt between $21,000 million and $22,000 million, but he assured that “it is not a debt that worries.”
Rather, the official has been concerned with knocking on the doors of other regional organizations to ask them for more money to borrow.
In fact, the minister reported in November that they requested the first loan for $75 million from the Development Bank of Latin America, from the Andean Development Corporation (CAF). “And there are more (operations) planned. It is a cheap source of financing,” Zelaya said.
But given the unrestrained indebtedness of the current government, international organizations, risk rating agencies, and financial analysis have warned that the country’s debt level may reach or even exceed 90%, which is a red alert.
The International Monetary Fund (IMF), for example, has stated that a level of debt considered controlled would be below 25% (of GDP) for emerging economies and that a critical level would be 40%.
Assembly endorsed uncontrolled loans
But the high level of debt does not depend only on the Executive Branch, but also on the Legislature giving the green light to the loans.
Since May 1, 2021, when the current legislature dominated by deputies related to President Nayib Bukele began, the rate of indebtedness has grown rapidly. In 2022 the deputies have not stopped or questioned any credit requested by the government; They have been billions of dollars that have had the endorsement of the Cyan bench and allies.
Given this, economists such as Ricardo Castaneda, from the Central American Institute of Fiscal Studies (Icefi), have pointed out that “citizens must be clear that all this indebtedness is going to be paid by the population with their current and future taxes.”