AGP Executive Report

IMF Boost for El Salvador’s Economy: The IMF approved about $138M (SDR 101.96M) after waiving a Bitcoin accumulation rule breach, clearing the way for continued funding under its $1.4B program, while projecting growth of 4.5% in 2026 and 4% in 2027. Bitcoin Strategy, Reframed: El Salvador says it remains “Bitcoin-only,” with the Chivo wallet’s majority control moved to a private operator and no further accumulation expected beyond documented private donations. Public Spending Push: The government rolled out a $110M early year-end bonus for public sector workers, supported by a law that shifts the aguinaldo payment window to Oct. 1–Dec. 20. AI Goes Hardware: El Salvador is expanding its AI plan into robotics, data-center engineering, sovereign computing, and high-voltage grid work, backed by new rules for national priority tech projects. El Niño Hits Agriculture: Farmers in the Dry Corridor are replanting after drought damage, with El Niño threatening crops, water, and electricity—raising food and income risks. Construction-Led Growth: El Salvador’s Q2 2026 GDP growth hit 5.1%, driven by construction, housing finance, and tourism-linked services, while agriculture contracted.

IMF & Bitcoin: El Salvador secured an immediate ~$138M IMF disbursement after waiving a breach tied to Bitcoin accumulation limits, while the IMF said the “one Bitcoin a day” approach remains intact and Chivo’s control has shifted to a private operator. Macroeconomy: The IMF also projected growth of 4.5% for 2026 and 4% for 2027, citing strong construction, tourism, investment, consumption, remittances, and capital inflows. Construction & tourism boost: El Salvador’s Q2 2026 GDP growth hit 5.1%, led by construction (+11.2%), housing finance and credit gains, and spillovers into accommodation/food services and real estate. El Niño risk to agriculture: A new report warns intensifying El Niño is disrupting rainfall across the Dry Corridor, threatening crops, water, electricity, and household food and incomes in El Salvador. Public spending push: The government injected $110M via early year-end bonus payments to public sector workers, following a legal change expanding the aguinaldo payment window. AI expansion: El Salvador is widening its AI push into robotics, data-center engineering, sovereign computing, and power-grid infrastructure under ANIA and new national-priority rules. Coffee sector spotlight: FAO marked International Coffee Day, stressing sustainable, climate-smart production and support for smallholder farmers.

Economic Growth: El Salvador’s GDP grew 5.1% in Q2 2026, up from 4.8% in Q1, driven by a construction-led boom (construction +11.20% and housing finance +65.1% through June 2026), which also lifted tourism-linked accommodation and food services (+6.29%) and real estate (+6.03%), while agriculture slipped -0.95% as El Niño hit yields. Construction & Trade: Construction imports surged to $1.13B in Jan–Aug 2026, with big jumps in intermediate materials and cement/lime/gypsum, plus a 15.3% rise in capital goods—signaling contractors are buying equipment and expanding capacity. Industrial Competitiveness: COEXPORT reports El Salvador ranks top in Central America on economic complexity and manufacturing exports, with a diversified, value-added export mix (knit apparel, plastics, electrical machinery, paper, mineral fuels). Energy Project: CEL’s LAGEO published a tender for integrated drilling services for eight geothermal wells at Chinameca (San Miguel), tied to a planned 25 MW project. Bitcoin & Events: El Salvador’s Bitcoin program is expanding into culture with Bitcoin Histórico plus the Renaissance Rodeo in November, linking “circular economies” with ranching and local food systems. Agriculture in the Region: Caribbean agriculture leaders called for better intra-regional shipping, cold storage, and worker-movement frameworks to move produce and support farm labor. Climate Risk: UNICEF warns 25.8M children across Latin America and the Caribbean face very high El Niño-related rainfall risks, threatening food, water, health, and education.

Stablecoin Remittances Clarification: El Salvador’s National Bitcoin Office denied any government pivot toward stablecoins, saying it has no plans to launch or operate any Bitcoin, crypto, or stablecoin wallet after the Chivo Wallet sale to a private operator, amid controversy over a stablecoin-based remittance app. Digital Payments Rollout: Modveon and Coinbase launched Sivar, a low-cost $2 remittance service using stablecoin settlement on Base, aiming to serve El Salvador’s nearly $9B remittance corridor. Renewables Push: El Salvador unveiled 10-year tax incentives for solar self-consumption, including import duty and VAT exemptions plus income tax deductions, targeting homes, businesses, and manufacturing. Construction Boom: Building activity is driving $1.13B in construction-related imports (Jan–Aug 2026), with cement and capital goods rising and spillovers into logistics and industrial suppliers. Coffee Recovery Watch: The 2025–2026 coffee harvest hit a 13-year high, but El Niño dry spells threaten the next cycle. Aviation Deal: AAR CORP. agreed to buy a 65% stake in El Salvador-based Aeroman parent MRO Holdings, planning capacity expansion and training.

Remittances & Fintech: Modveon and Coinbase launched Sivar, a low-cost stablecoin remittance app for El Salvador using Base, letting Salvadorans in the U.S. send transfers with a $2 flat debit-card fee and recipients receive funds via embedded non-custodial wallets or cash-out at 1,000+ locations—aimed at a $9B remittance corridor and 1.6M dependents. Education Logistics: El Salvador kicked off a nationwide sizing drive for 1.2M students to prepare 2027 school packages, with 500+ volunteers measuring uniforms and shoes so deliveries are “complete” and on time. Coffee Exports: El Salvador logged its best coffee harvest in over a decade—963,650 quintals (+12.2% YoY)—with exports at 591,086 quintals worth $190.15M, while El Niño threatens the next cycle. Aviation Services: AAR CORP. agreed to buy a 65% stake in El Salvador-based Aeroman parent MRO Holdings, targeting expanded maintenance capacity and training with MRO’s airport hub as the growth base. Tourism & AI: For World Tourism Day, El Salvador put AI at the center of discussions on trust and transparency, while UN Tourism ranked the country fastest-growing in the Americas and second worldwide. Bitcoin Policy: El Salvador’s National Bitcoin Office rejected claims of a stablecoin pivot, reiterating the country remains “Bitcoin-only” after the Chivo Wallet sale.

Remittances & Fintech: Coinbase-backed Modveon launched Sivar, a new El Salvador remittance app using Coinbase payments infrastructure and settling in stablecoins on Base; eligible senders pay a flat $2 fee, and more than 25,000 Salvadorans signed up ahead of launch. Energy & Infrastructure: El Salvador reported a 63.4% jump in electricity exports to $18.50M in the first eight months amid El Niño-driven drought, while ETESAL broke ground on the 115 kV San Miguel–Morazán transmission line to strengthen grid reliability. Tourism & AI: El Salvador put AI at the center of World Tourism Day 2026, hosting discussions on building trust and keeping tourism human as technology reshapes travel. US Trade Policy Impact (Pharma): The US exempted El Salvador and 19 other jurisdictions from 100% tariffs on select specialty medicines and ingredients, covering areas like rare diseases, fertility treatments, cell/gene therapies, and antibody-drug conjugates. Business Setup (Local Services): Invest El Salvador and APLAN published a step-by-step roadmap for launching a restaurant in San Salvador’s Historic Center, covering legal formation, tax and labor registrations, and permits.

US Pharma Tariff Relief: The U.S. Commerce Department published a Federal Register list exempting select specialty drugs and ingredients from a planned 100% tariff starting Sept. 29, including orphan drugs, fertility treatments, cell and gene therapies, and antibody-drug conjugates—covering India and 19 other jurisdictions, including El Salvador. Trade Advantage for Central America: Reporting says the exemption wave is giving Central America a duty edge in the U.S. market, with earlier deals restoring duty-free treatment for qualifying apparel and key farm exports. Energy Exports Rise: El Salvador’s power exports jumped 63.4% to $18.50M in the first eight months, driven by regional demand amid El Niño-linked drought constraints on hydro generation. Grid Upgrade: ETESAL broke ground on a 115 kV San Miguel–Morazán transmission line to strengthen reliability and support eastern demand. Tourism Push: El Salvador is highlighted for World Tourism Day 2026, with UN Tourism pointing to strong arrivals growth and a focus on digital transformation and AI. Business Setup Guide: Invest and APLAN outlined steps to open a restaurant in San Salvador’s Historic Center, from legal formation and tax registration to permits and operating licenses. Agriculture & Climate Risk: Coverage notes El Niño intensifying to very strong levels through early 2027, raising pressure on farming planning and yields.

Historic Center Business Setup: Invest and APLAN laid out a step-by-step roadmap for launching a restaurant in San Salvador’s Historic Center, from forming a legal entity and registering for tax and labor to securing permits and operating licenses, with construction permits typically taking about 20 days. Power Infrastructure: ETESAL broke ground on the 115 kV San Miguel–Morazán transmission line, aiming to strengthen grid reliability and directly connect to the Morazán substation under construction. Tourism Growth & Tech: El Salvador marked World Tourism Day 2026 with UN Tourism spotlighting a “Digital Agenda and Artificial Intelligence to Redesign Tourism” theme, citing 37% growth in international arrivals in H1 2026. Agriculture Cooperation: El Salvador and Kuwait discussed new collaboration in agriculture, AI and tourism, seeking investment and practical projects. Agricultural Planning in Cuba: In Guantánamo, officials toured farms and processing centers to advance the “cool season” planting plan, including soybeans, cassava, coffee harvest updates and revitalizing idle land. US Tariff Relief: The US Commerce Department listed El Salvador among jurisdictions eligible for zero tariffs on specified specialty pharma products and ingredients ahead of a Sept. 29 tariff deadline. Bitcoin Watch: Bitcoin hovered near $83,000 after last year’s peak above $126,000, with analysts pointing to ETF inflows and the next halving in 2028 as key market drivers.

Construction & TPS Uncertainty: A Massachusetts contractor says the expiration of Salvadoran Temporary Protected Status is already threatening jobs and unfinished housing projects, even as USCIS says TPS holders remain authorized to work—leaving firms stuck in limbo. World Tourism Day 2026: El Salvador is hosting the UN Tourism-linked event under “Digital Agenda and Artificial Intelligence to Redesign Tourism,” with leaders pushing AI, digital identity, and tech upgrades while stressing tourism must stay human. Regional Security in Haiti: OAS member states, including El Salvador, urge the UN Security Council to renew Haiti’s Gang Suppression Force mandate and fully fund, equip, and deploy it to support elections and restore access to infrastructure. Trade Policy & Pharma: The US lists India among countries eligible for zero tariffs on selected specialty drug categories and ingredients ahead of new 100% tariff steps, with El Salvador also named among eligible jurisdictions. Labor Mobility Data (US H-2B): USCIS reports high approval rates for H-2B worksite-linked cases across multiple states, signaling continued demand for temporary non-agricultural labor.

World Tourism Day 2026: El Salvador is hosting the UN Tourism observance today under the theme “Digital Agenda and Artificial Intelligence to Redesign Tourism,” with leaders pushing AI, digital identity and a more connected, human-centered travel industry, and pointing to next month’s WTTC Global Summit in Malta. Infrastructure & Construction: FOVIAL’s IX Engineering Fair 2026 is bringing local and international experts together to share new materials and methods aimed at upgrading El Salvador’s road conservation and execution standards. Radiological Safety Training: A new virtual international course on managing and responding to radiological emergencies and accidents in nuclear power plants is open for participation, developed with Salvadoran radiological protection partners and set to start in October. Diplomacy & Mobility: Kuwait and El Salvador signed a bilateral visa exemption agreement for holders of diplomatic, special and official passports, signaling broader cooperation on areas like tourism, coffee and agriculture. Regional Security Policy: OAS member states, including El Salvador, called for renewing Haiti’s Gang Suppression Force mandate and backing Haitian-led security solutions with personnel, funding and logistics. Business Climate Risk: A report highlights how El Niño is already disrupting crops across Central America, with investors and asset managers adjusting models to protect emerging-market portfolios—relevant for El Salvador’s food and supply chains.

World Tourism Day 2026 (El Salvador): UN Tourism is hosting the Sept. 27 celebrations in El Salvador under the theme “Digital Agenda and Artificial Intelligence to Redesign Tourism,” spotlighting how AI can reshape visitor experiences and help tourism businesses run more efficiently. Infrastructure & Construction: FOVIAL’s IX Engineering Fair 2026 is bringing regional experts together to modernize El Salvador’s road conservation, with technical talks on materials and execution methods. Energy & Training: A virtual international course on managing and responding to radiological emergencies is set to launch Oct. 21, with Salvadoran partners involved and applications due Oct. 14. Investment & Trade: El Salvador is exploring new Middle East-linked investment talks, including with Saudi Eksab, targeting energy, logistics, agribusiness, tourism, and technology services. Migration Cooperation: El Salvador and the IOM are advancing new initiatives to support Salvadorans on the move, aiming to turn international support into practical outcomes for jobs and services. Diplomacy: Kuwait and El Salvador signed a bilateral visa exemption deal for diplomatic, special, and official passport holders.

Tourism & Connectivity: Air Europa says it will start flights to San Salvador in the second half of December 2026, three times per week, boosting direct access for European travelers and giving a fresh lift to El Salvador’s volcano, beach and surf tourism pitch. Infrastructure Engineering: FOVIAL’s IX Engineering Fair 2026 in El Salvador brought regional experts together to share road conservation know-how, with technical sessions focused on materials and execution methods to modernize the road network. Investment Outreach: El Salvador is courting Middle East capital after UNGA81 talks with Saudi Eksab, with potential deals flagged across energy, logistics, agribusiness, tourism and technology services. Digital Trade: El Salvador highlighted how innovation and digital commerce—linked to Walmart’s investment—can open new sales channels for local businesses and help products reach international markets. Migration Cooperation: El Salvador and IOM agreed to expand initiatives supporting Salvadorans on the move, aiming to turn international support into practical services and opportunities. Business Climate: El Salvador also reinforced infrastructure momentum through permitting and real estate/infrastructure approvals, signaling continued focus on investment-ready conditions.

Infrastructure & Engineering: FOVIAL kicked off its IX Engineering Fair 2026, bringing regional experts to share new road conservation materials and execution methods aimed at upgrading El Salvador’s road network. Public Safety & Training: A virtual international course on managing and responding to radiological emergencies (with Salvadoran Association for Radiological Protection support) opens for applications until Oct. 14. Migration & Services: El Salvador and the IOM are aligning on new initiatives to support Salvadorans on the move, focusing on practical outcomes and expanded institutional responses. Investment Outreach: During UNGA81, El Salvador met Saudi Eksab to explore Middle East-linked opportunities in energy, logistics, agribusiness, tourism, and technology services. Tourism Connectivity: Air Europa announced new flights to San Salvador starting in the second half of Dec. 2026, three times weekly, boosting access for European travelers. Digital Commerce: El Salvador highlighted innovation and e-commerce opportunities tied to Walmart’s investment, pushing more channels for local products to reach international markets. Regional Security: The Shield of the Americas coalition advanced plans to target major armed groups and disrupt illicit financial flows across participating countries, including El Salvador.

El Salvador Tourism & Air Connectivity: Air Europa says it will start flying to San Salvador in the second half of December 2026, with three weekly trips—an extra direct option for European travelers drawn to volcanoes, beaches and surfing. Digital Commerce & Retail Investment: El Salvador is pitching innovation and e-commerce as trade multipliers, pointing to Walmart’s investment and new digital capabilities to help local firms sell beyond the domestic market. Construction & Urban Growth: The country is advancing major infrastructure and real estate approvals, including a new $38M luxury tower project (“Reforma 150”) and a push to streamline permitting for large investments. Agriculture & Food Supply: El Salvador is ramping up agricultural support to reassure markets against price spikes, while local production efforts—like bakery supply chains—aim to keep output steady. Regional Business & Travel: Gray Line is expanding in El Salvador, and the country is also spotlighting itself for World Tourism Day 2026. Security & Regional Policy: The U.S.-led “Shield of the Americas” coalition is targeting 24 armed groups and expanding coordinated sanctions and enforcement across partner countries, including El Salvador.

Tourism & Air Connectivity: Air Europa says it will start flying to San Salvador in the second half of December 2026, with three weekly trips—an extra Europe link for El Salvador’s volcano, beach and surf tourism push. Retail & Logistics: Toys “R” Us is set to return across Central America and the Caribbean, with El Salvador named a key growth market as operator CCI plans 60 megastores in five years, using a regional supply chain run from Panama’s Colón Free Zone. Digital Commerce & Trade: El Salvador is pitching innovation and e-commerce as a growth lever, pointing to Walmart’s investment and new tech capabilities to help local firms reach international customers. Construction & Permitting: The country continues streamlining permitting and advancing major infrastructure, including a new national stadium project supported by China. Agriculture Support: El Salvador ramps up agricultural support to reassure markets against price spikes. Regional Security: El Salvador is listed among Shield of the Americas participants targeting major Colombian armed groups, including FARC dissidents, ELN and Clan del Golfo. Film Industry: Salvadoran director Tatiana Huezo won major industry honors at San Sebastián for “Galerna,” reinforcing El Salvador’s creative exports.

Tourism Push: El Salvador is gearing up to host the official World Tourism Day 2026 celebrations (Sept. 25–27), with UN Tourism spotlighting the country as a destination and the program centered on a “Digital Agenda and Artificial Intelligence to Redesign Tourism.” Infrastructure & Construction: The new National Stadium is advancing with Chinese support, with tennis player Marcelo Arévalo touring the site and seeing seating and roof installation underway. Permitting & Investment Climate: The government says it has streamlined permitting, approving more than $11.8B in real estate and infrastructure, while a new professional responsibility law takes effect for construction permits and urban planning. Agriculture Support: El Salvador is ramping up agricultural support to reassure markets against price spikes. Retail & Logistics: Toys “R” Us plans a major Central America push, designating El Salvador as a key growth market, with regional megastores supplied through Panama’s Colón Free Zone. Regional Security: A US-led coalition is targeting 24 criminal groups with sanctions and coordinated enforcement across Latin America and the Caribbean. Diaspora & Remittances: A new IFAD report highlights how remittances are increasingly supporting rural households across low- and middle-income countries, including Latin America and the Caribbean. Business & Food Supply: An El Salvador bakery is leaning on local supply chains to keep production steady.