President Nayib Bukele revealed a part of his plan to spur the economy of El Salvador, one of the biggest objectives proposed for his second term. During a speech commemorating the country’s independence, Bukele stated that next year’s budget would be self-financed, featuring zero debt issuance to sustain government operations.

At the event, Bukele declared:

I announce that on September 30th we will present to the Legislative Assembly, for the first time in decades, the first fully financed budget, without the need to issue a single cent of debt for current expenses.

Bukele stated that El Salvador wouldn’t even pay for debt interest by issuing more debt during the period, stressing that all payments would be completed using self-obtained funds.

Bukele also highlighted the benefits of this frugal approach, assessing that while these will not be immediate, these will be more apparent in a “robust economy and a truly independent country not only because it has peace, freedom, and security, but because it will be financially and fiscally independent.”

While the focus of Bukele’s first term in office was to fight the criminal gangs that had taken control of the country, he explained that his second term would be focused on improving the country’s economy. For this, he has already attracted over $1.6 billion in private investments and has implemented several measures to fight increasing inflation.

Global markets reacted positively to this announcement, as Salvadoran bonds rose to their highest level since 2021. However, El Salvador still carries a heavy burden with its public debt, which reaches well over the $31 billion mark including pension funds obligations.

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