Government of El Salvador launches new Economic Plan
In the first days of 2020 the Government of El Salvador announced the launch of the “Plan Despegue Económico”. The economic plan will be developed by the government cabinet with the active participation of multiple actors from civil society. The objective is to jointly propose strategies and mechanisms that will allow the reactivation of the economy and achieve significant growth in El Salvador’s economy.
The plan is expected to be completed in the first half of 2020. However, of the first official communications of the government, one of the axes of the plan is to promote the tourism and mainly the linked one to the coastal zone, the development of infrastructure projects like: improvements to El Salvador’s International Airport that seek to strengthen its position as a “hub” for the main airlines operating in the country, the construction of the “by-pass” in the Port of La Libertad that would drastically reduce travel times to a beach area located just 35 kilometers from the capital, the extension of the coastal road to four lanes and the construction of a water treatment plant on El Zonte Beach, which is one of the main beaches for surfing; are some of the projects of the Government and foreign cooperation that seek to position El Salvador as a beach and surfing tourist destination.
One of the first results of this government initiative is that the country has been selected by the International Surfing Association (“ISA”) as the host of the world championship of surfing to be developed next May and that will serve as classification for the next Olympic Games, this event will serve to show the world the new hotel infrastructure with the country and those coastal areas with high potential for tourism development. At this point it is important to note that El Salvador has the Tourism Law that includes significant tax incentives for those domestic and foreign investors who wish to invest in the sector.
Therefore, the economic prospects for the “accommodation and meals” sector are very positive, remembering that in recent years this sector has been growing well above what the country’s economy has grown, is a preliminary number it is estimated that in 2019 the sector grew 5.3%, which implies a growth of more than twice the average of the overall economy and it is expected that all initiatives will provide a new impetus to the tourism sector and enable new investments.
Mauricio Orellana Caballero
Senior Associate
García & Bodán
El Salvador