El Salvador: Selected Issues

International Monetary Fund

No 2016/209, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper focuses on policies to raise growth; underpin fiscal sustainability while enhancing social safety nets; and strengthen financial sector stability, deepening, and inclusiveness. GDP growth averaged 2 percent during 2000–14, well below the Central American regional average of 4½ percent. While the underlying causes of the low growth are complex, a key channel through which they are evident appears to be low investment. Given the need to increase growth, revenue-raising measures should be accompanied by cuts in distortionary taxation. Stress tests suggest that financial buffers are adequate to contain most risks. The financial deepening and advancing financial inclusion could have a meaningful impact on both growth and poverty.

Keywords: ISCR; CR; TFP growth; employment growth; TFP; crowding out; liquidity; productivity shortfall; labor market rigidity; TFP performance; liquidity constraint; Pension spending; Fiscal rules; Pensions; Central America; Global (search for similar items in EconPapers)
Pages: 84
Date: 2016-07-01
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