El Salvador is a country that polarizes.

Some people embrace it for its security, economic and social reforms, President Bukele, Bitcoin and speculation that it will be the next Singapore.

Meanwhile, its detractors say the new El Salvador is a mirage, that people get thrown in jail without due process, that democracy is declining.

This ideological clash expands into perception of the economy. Some claim it is boom-town, while others say the numbers are all fake.

Feedback from the road

I went back to El Salvador for a few days in July. I spent time meeting with expats, locals, read the IMF reports and my El Salvador realtor Roman introduced me to ministry of the economy officials with whom we had the opportunity to discuss numbers in detail.

As is often the case when people get very emotional over a topic, the reality on the ground is nuanced.

In this video I elaborate on my learnings and key thoughts on the Salvadoran economy.

https://youtu.be/gq7KmZgeAvs

Here is the full El Salvador real estate investor guide.

And we can also help you obtain the El Salvador citizenship by investment for a $1 million donation. 

Advantages:

• Visa-free Schengen access
• Can be paid with crypto
• Obtained in 2-3 months
• Not typically viewed as a “citizenship by investment”

Cons:

• The price 😄

More content upcoming on El Salvador

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The Wandering Investor.

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Article on El Salvador:

• El Salvador Real Estate Market: 2025 Investor Guide – is it too expensive already?
• Real estate market in El Salvador – overview of opportunities
• El Salvador Citizenship by Investment 2025

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Transcript of “El Salvador’s Economy: The next Singapore or just another emerging market?”

LADISLAS MAURICE: Hello, everyone. Ladislas Maurice of The Wandering Investor. I just came back from a trip from El Salvador, where I met officials of the Ministry of the Economy, I read the latest IMF reports, I met people on the ground, etc. And I just want to make a video today to try to have a rational discussion on the economy of El Salvador. Because whenever people discuss El Salvador, there are just too many emotions, even with regards to the economy.

On the one hand, you’ll have people saying that El Salvador is the next Singapore, which it will never be, for a number of reasons. And on the other side, you have people that say that El Salvador is a complete basket case, that the government is a complete fraud, that nothing is serious, it’s all smoke and mirrors. And that’s also completely false. This video is to set the record straight with regards to the economy. We’re not going to discuss politics, we’re not going to discuss the camps, just pure economics.

Economic growth and fiscal situation in El Salvador

The first thing to note is that growth in El Salvador has been relatively lackluster. We’re talking growth of 3% to 4%, which contradicts all the headlines that El Salvador has been making. Effectively, El Salvador has a lower growth rate than nearby Nicaragua. And you can just see it in terms of infrastructure spend, for example, Nicaragua spends twice as much as a percentage of its GDP on infrastructure compared to El Salvador. For all the talk of infrastructure development, Nicaragua is actually doing a lot more, thanks to the Chinese.

The external debt levels are also high in El Salvador, which was mentioned in the IMF report, which means that El Salvador is fundamentally prone to external shocks due to these high debt levels and due to the fact that it dollarized, so it can’t print its own money. Sure, not being able to print your own money is a negative, but then again, when you’re a small country with a strong history of poor governance, not being able to print your money can be an advantage. In this case, it means the government needs to manage its current account and fiscal deficits very, very closely, which is why it needed help from the IMF in the first place.

Back in early 2023, the government almost defaulted on its debt, but now the state situation has really stabilized. They’ve done some debt buybacks at lower rates, and there is some level of stability in the system. In spite of this relatively lackluster growth, when you go to San Salvador, when you go to the main coastal areas, you see a lot of growth. Last time I was in El Salvador was in late 2023. I was back there in July 2025, and the difference was extremely visible, a lot more infrastructure, a lot more foreign investment going into the country. But you don’t see this in the total GDP figures. Why? Because the growth for now is not evenly distributed throughout the country. It’s just going into the core areas, which is a typical symptom of early-stage growth.

Foreign direct investment in El Salvador

And when you look into foreign direct investment figures for El Salvador, they’re actually quite poor. There hasn’t been that much foreign direct investment into the country. There’s been a lot of publicity, there’s been a lot of talk, but big foreign capital hasn’t really arrived yet in the country. A lot of people will say that’s a negative, but I prefer to look at it as a positive in the sense that the macro situation has stabilized without an influx of foreign direct investment, and we’re starting to see signs that big foreign companies, big foreign corporates are really looking at El Salvador. And these numbers haven’t started showing up yet in the official statistics, but they will in the future. From that point of view, it’s actually quite positive.

Tourism growth in El Salvador

We’re still in the early stages of El Salvador getting out of its rut, and that’s also visible in the tourism numbers, which are surging, and which is actually visible on the ground. In 2024 versus 2019, the volume of tourism went up over 80% in El Salvador. That’s in the number of people, but the growth is even bigger in terms of gross proceeds, because people are staying longer in El Salvador, or are spending more per trip. And this is due to two factors. One, when you arrive at the airport in El Salvador, you get six months on arrival, which is very attractive. And also now, because of all the publicity, the crypto people, the surf, which is getting, increasingly, a lot of publicity, the type of people going to El Salvador as tourists is increasing in quality as well, and they have more disposable income.

So much so that in peak season, the country is running out of hotel rooms and capacity, so the government even has a program to encourage foreign investment into hotels. They’re trying to attract an extra 30,000 hotel rooms by 2030.

Government initiatives in El Salvador

And then a lot of people are quick to criticize the government for things like Bitcoin City, and the new airport in the east of the country, which is taking a while to develop, all the volcano bonds that they were discussing a few years ago. And it’s true, a lot of these initiatives have failed or are very much delayed, but at the end of the day, I’m not even sure that it really matters. I see it as just doing business and getting free publicity.

The government has an idea. They say, “We’re going to raise volcano bonds to create some bitcoin city in the east of the country.” And they get hundreds of millions of dollars of free PR across the world for months, if not for years, with all these people getting super excited. But then, in the end, they try to raise the money, it doesn’t work. The thing fails. There’s no Bitcoin City in the east. They’re still saying there will be, but there really practically there’s nothing that’s happening. But does it really matter? No money was lost. It was just all talk, and it attracted foreign investment, it attracted tourism, it raised the profile of the country, but then actual investments that matter don’t get a lot of publicity because they’re not exciting.

Infrastructure development in El Salvador

Again, let’s talk about the new airport of the Pacific in the east. There’s a lot of controversy around the environment and this and that, and the whole airport is delayed. They’re also talking about a train from the east of the country that will go up to Guatemala. It’s still in the engineering phase, but it’s delayed. The funds aren’t there, so all big talk. But when it comes to actual investments that matter, no one really talks about it. For example, a private Turkish company has just committed to investing $1.6 billion, which is a significant amount for El Salvador, to modernize and revamp the two main sea ports of the country.

I mean, this is huge. This actually matters more than a second airport that the country doesn’t necessarily need that much, which is mostly political to get votes from people from the east of the country. But when there are hard investments in actual logistics, these don’t get mentioned. But these are the investments that actually fundamentally matter. And the government is pretty creative. They have all these free trade zones. They have some interesting tax incentives as well. If you build a building of 35 stories or more in El Salvador, you will get a 15-year income tax exemption, because they want to incentivize that sort of investment to really create a skyline in San Salvador.

Bitcoin as legal tender in El Salvador

And then when it comes to Bitcoin as a legal tender, there’s been a lot of drama around that, because the IMF imposed on the government to stop Bitcoin as legal tender in El Salvador as part of the latest IMF deal. And people have been going crazy about that. They say, “Oh, Bukele is a traitor. He played all of you.” When you actually look at the situation on the ground, one, crypto is not that important to the economy in El Salvador. It gets a lot of free press, which is good for the country, but in actual fact, very little happens with crypto in El Salvador. And the fact that it’s not legal tender on the ground hasn’t really changed anything whatsoever, except for two things.

One, you can’t pay for your taxes in crypto. Okay, big deal. And two, there is a government-sponsored wallet, the Chivo, which will have to be withdrawn. Whatever, people are now using private wallets. It’s fine. And you can still go anywhere in the economy. You can pay with crypto in stores. You can buy a car with crypto. You can buy real estate with crypto. In the private sector, crypto still works. It really hasn’t changed a thing. What it did do, though, is give El Salvador a lot of publicity, and then also a free bargaining chip with the IMF when it needed a bailout.

Out of thin air, Bukele, one, got a bunch of free publicity for the country. And then when he needed the IMF, he was able to take this and say, “Hey, the legal tender, we can remove it if you want, but it’s going to cost you this.” Overall, I don’t see it as him being a traitor at all with regards to crypto, if there’s such thing as being a traitor towards crypto, but I just see it as smart politics and very smart communication, which is a recurring theme in that administration.

Remittances to El Salvador

And at the end of the day, everyone is focused on crypto, crypto, El Salvador, crypto, crypto. Apart from a few specific areas in the country, it doesn’t matter. And let me be extremely clear about something, the number one variable for the Salvadoran economy, it’s not crypto, it’s not foreign direct investment, it’s not any of this. It is US immigration policy and the US labor market.

Remittances from Salvadorans living overseas represent 24% of El Salvador’s GDP. I mean, this is massive. It’s amongst one of the highest in the world. This increase really took place during the Biden years, when he opened the door to illegal immigration and hundreds of thousands, if not millions of Central Americans just poured into the United States and started working there. Trump is talking a big game about deporting people, but he hasn’t been doing anything at all. They’re there. They’re earning money. They’ve been in the US for a bit longer. They now speak better English, and they’re just going up in terms of skills and wages, and they’re sending more and more money to El Salvador. And they’re more comfortable doing this than before.

The old Salvadorans, who had been in the US for a long time, because of the crime levels, because of the corruption, because of all the issues in El Salvador, were just sending enough money to make sure the family could survive, but now they’re actually investing back in El Salvador. They are participating in the real estate frenzy. They’re building homes, they’re buying pre-construction apartments, and they’re really helping drive the economy in El Salvador. Again, this is the biggest variable for the Salvadorian economy, more than anything else.

El Salvador IMF deal

And when it comes to the IMF deal, I went into it in detail. Look, I’m typically very skeptical of the IMF. They are known to do things to countries across the world that are not always very positive at all for the countries.

In this particular case, that IMF deal is just pretty reasonable. All they’re saying is you need to freeze wages because wages grew way too much. Bukele, as part of his populist agenda, just created a bunch of government jobs, increased wages, but it was just too much. The IMF said, “Hey, you’ve got to freeze these wages. You need to fire some people.” He also started spending way too much on healthcare. Actually, when you go to El Salvador, everyone’s really happy with healthcare now, but when you look at the numbers, you see why, because so much more being spent on healthcare than the country can actually afford. They’re trying to limit this. But at the same time, the IMF deal is very cognizant of the fact that El Salvador needs to work on capacity building, so there are no cuts when it comes to infrastructure.

Again, when the government is saying, “Oh, we can’t really develop infrastructure. Oh, we’re more restrained in terms of infrastructure development because of the IMF deal,” that’s complete nonsense. It’s just because the government doesn’t have the money, it’s not because the IMF was trying to restrict infrastructure development. They understand the need for capacity building. And same thing with education, they’re not advocating for cuts in education, they actually kept that aside because they understand that, again, the education levels in El Salvador are still very poor, and that’s a big impediment to development in the country, and this needs to be improved. And the cuts shouldn’t happen here, but rather in other places, like wages, and, like, healthcare, that have just received too much attention as of late.

The other request we discussed, which was the removing Bitcoin as legal tender. We understand the political reasons for this, but for the country, it doesn’t actually change anything in practice. And thirdly, the IMF wanted more transparency with regards to the government budget. And again, when you look at international rankings, El Salvador is right at the bottom, together with places like Bolivia in terms of budget transparency, and way lower than countries that are typically branded as dictatorships, like Nicaragua. Again, that was not an unreasonable request. Nothing in that IMF deal was particularly unreasonable.

To conclude, El Salvador is doing its thing. It’s gradually developing. It’s making a lot of noise. Obviously, not all the noise is materializing into actual initiatives, but it’s attracting investment. It will keep attracting more investment. Tourism is growing. And the country, economically speaking, if it continues on the current trajectory, is generally on the right path. This being said, it is prone to external shocks, so it’s not a risk-free destination from an investment point of view.

How to get residency and buy real estate in El Salvador

If you’re interested in getting residency in El Salvador, there’s a link below with all the information on how to do this. And I also wrote a very detailed report on the real estate market in El Salvador, the cities to look into, the cities to avoid, some key learnings, the tax system, etc. It’s very thorough. There is also a link below.