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The IMF expects El Salvador to grow by 4%, exceeding the 2.5% GDP growth forecast earlier.
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2025 primary budget target on track; 2026 budget approved, with deficit reduction.
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Chivo wallet sales negotiations have advanced, Bitcoin project discussion continues.
M. Torres, the Chief of the International Monetary Fund Mission, issued a press release on December 22, 2025 following discussions with Salvadoran officials regarding the second review the 40-month Extended Fund Facility agreement. The statement covered economic performance, fiscal goals, and ongoing discussions around cryptocurrency infrastructure.
El Salvador’s economic growth is faster than expected due to improved confidence, record-breaking remittances and increased investment activity. The real GDP growth is expected to reach 4% in this year with positive prospects for 2026. This is higher than the IMF’s projection of 2.5% in 2025.
The Fiscal Consolidation Targets are On Track
The authorities are committed to fiscal consolidation and the primary balance target of 2025 is on track to be achieved. The recently approved budget for 2026 aligns further deficit reduction with social spending expansion. These efforts support the accumulation of reserves and the reduction of domestic borrowing in line with program objectives.
The structural reform agenda continues to advance in multiple areas. A medium-term fiscal plan was published alongside an actuarial study on pensions. Reforms in financial stability strengthen the legal framework of bank resolution, crisis management and deposit insurance schemes. Basel III regulations have been adopted to increase liquidity coverage and net-stable funding requirements.
The Legislative Assembly has approved a new AML/CFT Law aligning the legal frame work with international best practices. This law addresses concerns raised previously about El Salvador’s compliance to global financial transparency standards.
According to the statement, negotiations for the sale of government eWallet Chivo are well underway. The Bitcoin project continues to be discussed in terms of enhancing transparency, protecting public resources, and minimizing risks. This is still a controversial element of the second review.
El Salvador’s Commitment Regarding Bitcoin Acceptance
El Salvador agreed, in the original EFF agreement signed in December 2024 that Bitcoin acceptance would be voluntary for the private sectors and that the public sector would gradually reduce its participation in Bitcoin related activities. The Chivo wallet is the primary vehicle for government cryptocurrency activities.
El Salvador is reported to have acquired around 1,098 BTC in December 2025, despite its commitments to reduce Bitcoin involvement by the public sector. The exact terms of the Chivo Sale are still being negotiated between Salvadoran authorities, and IMF staff.
Torres said that Torres expects to continue a close engagement with the authorities with the goal of reaching an agreement at the staff level on all policies and the reforms required to complete the second EFF review.
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