For the first time in decades, the Government of El Salvador has presented a fully funded budget for the year 2025, without the need to cover a fiscal gap. The Minister of Finance, Jerson Posada, highlighted the significant progress in reducing this gap, comparing the current situation with that of previous years.
“In 2019 it was $1.2 billion and thanks to our efforts, for this year it has been reduced to $338.6 million,” explained the official during his speech at the Finance Commission of the Legislative Assembly.
One of the highlights of the 2025 Draft Budget is the projected growth in tax revenues. According to Posada, a collection of $7,677.6 million is estimated, which would represent an increase of 5.6% compared to 2024.
“This growth is due to the economic boom, public safety and the increase in tourism,” said the Minister.
The budget also places considerable emphasis on public investment, with an allocation of $1,700.5 million to the Annual Public Investment Program (PAIP), reflecting year-on-year growth of 8.4%. This investment, according to Minister Posada, “is key to continue promoting the economic development of the country.”
In terms of social programs, $930.4 million has been allocated for key areas such as education, health, agriculture and social development, while $217.4 million will be used for subsidies aimed at vulnerable sectors of the population.
Finally, Minister Posada denied rumors about possible increases in the Value Added Tax (VAT), making it clear that “the 2025 Budget Project does not contemplate any increase in VAT. What has been circulated by some voices is false, the Government does not plan to increase any taxes.”
This announcement reflects the Government’s commitment to economic stability and social development, with a clear focus on continuing to improve the quality of life of Salvadorans.