El Salvador’s economy performs strongly, IMF says, as Bitcoin waiver clears the way for funding

The International Monetary Fund has a verdict on El Salvador’s economy: it is doing well. The fund projects real GDP growth of 4.5% for 2026, following a 2025 that beat expectations.

It is also notable that the IMF granted a waiver after the country breached a program condition tied to Bitcoin accumulation.

The numbers behind the IMF’s optimism

The growth story starts with last year. El Salvador’s economy expanded by 3.9% in 2025, a result the IMF said outstripped what had been expected.

The momentum appears to have carried into 2026. In the second quarter, the economy grew 5.1% year-over-year, with output reaching $10,060.6 million.

Construction was one of the standout sectors. Activity there rose 11.2% in Q2 2026, part of gains spread across multiple parts of the economy.

The IMF pointed to several engines behind the expansion. These include strong investment levels, rising private consumption, large remittance flows from abroad, a revival in tourism, and sizable capital inflows.

The fund also credited the government’s macroeconomic policy choices. In its view, those decisions have strengthened El Salvador’s fiscal position and built up its external buffers.

A fresh check from Washington

The assessment came after the IMF reached a staff-level agreement on the combined second and third reviews of El Salvador’s Extended Fund Facility, or EFF.

Following that agreement, the IMF Executive Board approved a disbursement on October 1, 2026. The amount was approximately $138-140 million, intended to support ongoing fiscal and structural reforms.

That payment sits within a larger arrangement. The EFF program, worth $1.4 billion, was established in February 2025.

The program carries specific fiscal goals. It targets a primary surplus of 3.7% of GDP by 2027 and aims to bring public debt down to 80% of GDP by 2030.

Security as an economic story

The IMF tied part of the improved outlook to security gains, which it said are reflected in rising investor confidence. The homicide rate fell from approximately 54 per 100,000 people in 2018 to around 1.8 in 2024.

The Bitcoin wrinkle

During its reviews of the EFF arrangement, the IMF granted El Salvador a waiver for a breach of performance criteria related to Bitcoin accumulation.

In plain terms, the country did not meet a condition in its loan agreement connected to buying Bitcoin. The IMF chose to forgive the miss rather than halt the program.