AGP Executive Report

IMF & Bitcoin: The IMF approved El Salvador’s second and third reviews under its $1.4B Extended Fund Facility, unlocking about $138M after waiving a breach tied to the government’s Bitcoin accumulation limits; the Fund says El Salvador won’t pursue further accumulation beyond documented donations, while Chivo Wallet control has shifted to a private operator. Macroeconomy: The IMF projects 4.5% GDP growth in 2026 and 4.0% in 2027, citing stronger performance, improved buffers, and progress on fiscal and governance reforms. Public spending boost: El Salvador launched $110M in early year-end bonus payments to public sector workers, with the legal payment window extended to Oct. 1–Dec. 20 to pull forward holiday spending. Crypto policy stance: El Salvador’s National Bitcoin Office pushed back on “stablecoin pivot” claims, reiterating the country remains Bitcoin-only and that no new state wallets are planned. El Niño risk: A report warns El Niño-driven drought and irregular rains are already hurting crops and water/energy systems across the Dry Corridor, including El Salvador.

IMF & Bitcoin: The IMF completed El Salvador’s second and third reviews, approving an immediate SDR 101.96 million (about $138M) disbursement after waiving a missed Bitcoin accumulation performance condition; the Fund says no further accumulation is expected beyond documented donations, while Chivo’s majority control has moved to a private operator. Macroeconomy: The IMF projects growth of 4.5% for 2026 and 4% for 2027, citing stronger buffers, fiscal progress, and improved investor confidence. Public spending: El Salvador launched $110M in early year-end bonus payments to public workers, following a legal change that shifts the aguinaldo payment window to Oct. 1–Dec. 20. AI push: The government is expanding its AI strategy beyond software into robotics and advanced digital infrastructure, including data-center and energy/grid engineering. El Niño risk: UNICEF warns 25.8M children across LatAm face very high El Niño-related climate risks, with impacts ranging from food and water disruptions to flooding. Trade & investment signals: The U.S. Embassy highlighted the IMF milestone as a boost for investor confidence and future FDI.

Budget & Growth: El Salvador submitted a $12.421B 2027 budget to the Legislative Assembly, boosting spending 17.7% while keeping current tax rates and promising no new taxes, with education set at $3.416B (8.1% of GDP) plus higher health, justice/defense, and community infrastructure. Economic Pulse: The Central Reserve Bank says GDP grew 5.1% in Q2 2026, led by construction (up 11.2%) and stronger housing and tourism-linked services, even as agriculture slipped under El Niño pressure. Labor Policy: The government is wrapping consultations on workday reform with international bodies (ILO, UNDP, multilateral banks) before sending a proposal through the Higher Labor Council and, if approved, to the Legislative Assembly. Bitcoin & Payments: El Salvador’s Bitcoin program is expanding into November “cowboy culture” via Bitcoin Histórico plus the Renaissance Rodeo, while the country continues its stablecoin push through new app rollouts and partner payments. Energy Projects: CEL/LAGEO published a tender for integrated drilling services for eight geothermal wells at Chinameca (25 MW planned), with bids due Oct. 16. Elections Calendar: The Supreme Electoral Tribunal set Feb. 28, 2027 for presidential, legislative, and municipal elections, with 6.5M registered voters (about 1M abroad).

El Salvador Education Push: El Salvador submitted its 2027 national budget to the Legislative Assembly, earmarking more than $3.4B for education and aiming to lift education spending to over 8% of GDP as part of a broader modernization plan. CAF Financing Talks: President Nayib Bukele met CAF Executive President Sergio Díaz-Granados to expand support for education, health, aviation, and public infrastructure, with CAF signaling readiness to mobilize new resources. Construction Boom Signals Demand: Central Reserve Bank data show construction-related imports hit $1.13B (Jan–Aug 2026), with big jumps in intermediate materials and cement-related imports, plus rising capital-goods purchases. Crypto Remittances Clarified: El Salvador’s National Bitcoin Office denied any stablecoin “pivot,” saying the state won’t run crypto wallets after the Chivo Wallet sale, amid debate sparked by stablecoin remittance apps. Stablecoin Remittance Shift: Separate coverage says El Salvador is choosing USDC over USDT for stablecoin remittances, tied to Base-based services. Renewables Incentives: New tax incentives under El Salvador’s renewable energy law are lowering barriers for solar adoption, including import duty and VAT exemptions and 10-year income tax deductions. Health Milestone: El Salvador became the first in Central America—and second in the Americas—to eliminate trachoma as a public health problem, validated by WHO/PAHO. Trade & Industry: COEXPORT reports El Salvador leads Central America in economic complexity and manufacturing exports, reinforcing its value-added export base. Regional Security Context: OAS and the UN Security Council moved to renew and expand Haiti’s Gang Suppression Force mandate, while El Salvador is listed among OAS signatories. Brazil Election Watch: Reuters coverage highlights Brazil’s tight presidential race and the role of the Supreme Federal Court amid corruption allegations, with potential spillover for regional trade and politics.

Stablecoin Remittances: Modveon and Coinbase launched Sivar in El Salvador, letting Salvadorans in the U.S. send remittances via debit cards with a flat $2 fee and receive funds in app-linked non-custodial wallets on Coinbase’s Base network, targeting a ~$9B remittance corridor. Bitcoin Policy Pushback: El Salvador’s National Bitcoin Office rejected Bloomberg claims of a shift to dollar-backed stablecoins, reiterating the country remains “Bitcoin-only” and that no official stablecoin/crypto wallets are planned. Coffee Exports Surge: El Salvador logged its best coffee harvest in over a decade—963,650 quintals (+12.2% YoY)—with exports up to 591,086 quintals and $190.15M, though El Niño threatens the next cycle. Aviation Deal: AAR agreed to buy a 65% stake in El Salvador-based MRO Holdings (Aeroman), aiming to expand maintenance capacity and training with MRO’s El Salvador airport operations as the regional hub. Education Logistics: The government launched a nationwide sizing drive for 1.2M students ahead of 2027 school packages, measuring uniforms and shoes with 500+ volunteers. Tourism & Nature: Apulo Lake Park reopened with extended hours and doubled attendance, while Jiquilisco Bay was added as El Salvador’s first WHSRN Site of Regional Importance for shorebird conservation.

Digital Dollars & Remittances: El Salvador launched Sivar, a national digital platform for verified communities and cross-border payments, built with Modveon and running on Coinbase’s Base network, letting eligible U.S. senders transfer to verified recipients in El Salvador for a flat $2 fee. Stablecoin Rails: The government also rolled out a new app for holding and sending digital dollars via Coinbase’s Base network, extending the country’s shift toward stablecoin-based payment infrastructure. Aviation MRO Deal: AAR agreed to buy a 65% controlling stake in MRO Holdings in a $4B implied deal, with MRO’s El Salvador maintenance footprint highlighted as part of a broader Americas expansion. US Pharma Tariff Relief: The U.S. exempted India and 19 other jurisdictions—including El Salvador—from a 100% tariff on select speciality medicines and ingredients (rare disease, fertility, cell/gene therapies, ADCs, and related components). Immigration Policy Tension: Reporting says the White House paused TPS termination for about 200,000 Salvadorans after DHS moved to end protections, underscoring pressure between business interests and immigration hardliners. Security & Regional Politics: The U.S.-backed “Shield of the Americas” continues to draw debate over its scope beyond security, while a growing Honduras migrant caravan heads north toward the U.S. Crime Case: A deported Salvadoran man was sentenced to 63 months in federal prison for a Southern California robbery spree after reentering the U.S. illegally.

US Pharma Tariff Relief: The U.S. will exempt select speciality drugs and related ingredients from a looming 100% tariff, with zero ad valorem duty for products covering rare diseases, infertility, cell/gene therapies, and antibody-drug conjugates—plus eligible components. Central America Trade Upside: A string of U.S. carve-outs is giving CA exporters a duty advantage versus parts of Asia, including renewed duty-free treatment for qualifying apparel and a broader set of agricultural exemptions. El Salvador in the List: El Salvador is named among 20 jurisdictions eligible for the zero-tariff pharma framework, a direct boost for regional supply chains tied to specialty medicines. Energy Exports Lift: El Salvador’s electricity exports jumped 63.4% to $18.5M in the first eight months, helped by regional demand as El Niño cut hydro output. Grid Upgrade: ETESAL broke ground on a new 115 kV San Miguel–Morazán transmission line to strengthen reliability and support eastern demand. Tourism & Tech Push: UN Tourism’s chief toured San Salvador’s heritage sites during World Tourism Day 2026, highlighting digital and AI-driven visitor experiences. Bilateral Finance Deal: El Salvador and Türkiye signed a double taxation avoidance agreement to support cross-border investment and reduce double taxation risk.

Historic Center Push: Bukele’s latest spotlight on San Salvador’s Historic Center underlines how recovered public spaces are feeding tourism and commerce, with long-term planning through 2040 aimed at heritage, investment, housing and urban growth. Restaurant Launch Guide: Invest El Salvador and APLAN laid out a step-by-step path for opening a restaurant in the Historic Center, from forming the right legal entity and tax registrations to labor setup and APLAN permits, with construction approvals typically taking about 20 days. Power Infrastructure: ETESAL broke ground on the 115 kV San Miguel–Morazán transmission line, a grid-reliability upgrade that will connect to the Morazán substation now under construction. Trade & Tax Deals: El Salvador signed a double taxation agreement with Türkiye to reduce double-tax risk for cross-border business, and held talks with Kuwait on cooperation in agriculture, AI and tourism. US Tariff Relief (for El Salvador): The US Commerce Department listed El Salvador among jurisdictions getting 0% tariffs on certain specialty pharma products and ingredients ahead of a broader 100% tariff start date. Energy/Markets Watch: Bitcoin surged in global headlines, with analysts pointing to ETF inflows and the 2028 halving as key drivers—while prices remain highly volatile.

TPS Uncertainty Hits Salvadoran Construction Jobs: A Massachusetts contractor says his company’s housing work depends on whether Salvadoran TPS is extended after Sept. 9 expirations, warning that limbo could stall projects and paychecks for thousands of workers. World Tourism Day, AI Push: As El Salvador hosts World Tourism Day under “Digital Agenda and Artificial Intelligence to Redesign Tourism,” global voices stress that tech and digital identity can boost travel—while keeping people at the center. Regional Security Diplomacy (Haiti): OAS member states urged the UN Security Council to renew and fully deploy Haiti’s Gang Suppression Force mandate, calling for personnel, financing, equipment, and logistics. US Tariff Relief for Specialty Drugs: The US Commerce Department listed India (alongside El Salvador among others) for zero tariffs on specific specialty pharmaceutical categories ahead of a Sept. 29 tariff deadline. El Salvador Tourism & AI Adoption: Coverage highlights El Salvador’s growing AI and digital commerce momentum in tourism, positioning tech as a growth lever for small businesses. Climate Migration Law (US): Illinois became the first state to plan for climate-driven displacement, setting up reports on how migration could stress infrastructure and resources.

World Tourism Day 2026: El Salvador is hosting the official Sept. 27 celebrations under the theme “Digital Agenda and Artificial Intelligence to Redesign Tourism,” with leaders pushing AI, digital identity and more connected tech to improve visitor experiences while keeping tourism human. Bilateral Deals: Kuwait and El Salvador signed a visa exemption agreement for holders of diplomatic, special and official passports, and both sides flagged cooperation in food security, tourism, coffee, agriculture, renewable energy, education, trade and investment. Investment & Finance: T. Rowe is using custom climate analytics to protect its US$165B emerging-market portfolio from El Niño fallout, noting impacts already hitting crops in Honduras and El Salvador. Regional Security & Policy: OAS member states, including El Salvador, urged the UN Security Council to renew Haiti’s Gang Suppression Force mandate and back Haitian-led security solutions. Legal/Immigration: A U.S. judge ordered DHS to return a deported Salvadoran-bound teen asylum seeker after finding contempt for violating court orders. Crypto Markets: A U.S. push for a national Bitcoin strategic reserve is gaining momentum, with lawmakers advancing proposals that could reshape government digital-asset strategy.

World Tourism Day 2026: UN Tourism is marking Sept. 27 with the theme “Digital Agenda and Artificial Intelligence to Redesign Tourism,” and the official celebrations are hosted in El Salvador—spotlighting how AI can reshape itineraries, improve efficiency for tourism firms, and push more sustainable travel. Set-jetting boom: A separate roundup shows how movie/TV locations become permanent fan pilgrimage sites, from “3 Idiots” in Ladakh to “Lord of the Rings” landscapes in New Zealand—an angle that matters for El Salvador’s tourism marketing. AI adoption in El Salvador: Microsoft data says 20.1% of El Salvador’s working-age population used generative AI tools in Q2 2026, up from 18.3% and ranking 3rd in Central America. Infrastructure know-how: FOVIAL held its IX Engineering Fair 2026 to share new road conservation techniques with regional delegations. Migration cooperation: El Salvador and the IOM agreed on new initiatives to support Salvadorans on the move. Investment outreach: El Salvador’s UNGA talks with Saudi Eksab explored deals in energy, logistics, agribusiness, tourism and tech services. Diplomatic ties: Kuwait and El Salvador signed a visa exemption agreement for diplomatic, special and official passport holders. Legal development affecting deportations: A U.S. judge ordered DHS to return a Salvador-bound teen asylum seeker after finding contempt for violating court orders.

Visa & Diplomacy: Kuwait and El Salvador signed a bilateral visa exemption deal for holders of diplomatic, special, and official passports, aiming to deepen cooperation in areas like food security, tourism, coffee, agriculture, renewable energy, education, and trade. Migration & Policy: A federal judge held the U.S. Department of Homeland Security in contempt for deporting a teenage asylum seeker to El Salvador despite court orders, ordering his return so he can pursue his asylum claim. Investment Outreach: El Salvador is courting Middle East capital after Vice Minister Adriana Mira met Saudi Eksab’s CEO to explore investment in energy, logistics, agribusiness, tourism, and technology services. Infrastructure & Jobs: FOVIAL hosted its IX Engineering Fair 2026, bringing regional experts to share road conservation methods and modern construction techniques. Tech Adoption: El Salvador ranked third in Central America for generative AI use among working-age adults, with adoption rising to 20.1% in Q2 2026. Regional Security: Colombia’s VP said it supports the “Shield of the Americas” security alliance but that Colombian forces—not U.S. troops—will conduct operations inside Colombia.

Tourism & AI Push: El Salvador is hosting World Tourism Day (Sept. 27) with UN Tourism’s theme “Digital Agenda and Artificial Intelligence to Redesign Tourism,” positioning the country’s tech-forward tourism agenda for small businesses. AI Adoption Benchmark: A Microsoft study says 20.1% of El Salvador’s working-age population used generative AI tools in Q2 2026, up from 18.3% and ranking 3rd in Central America. Infrastructure Skills Boost: FOVIAL held its IX Engineering Fair 2026, bringing regional experts to share new road conservation materials and execution methods. Migration Cooperation: El Salvador and the IOM agreed on new initiatives to support Salvadorans on the move and turn international cooperation into practical outcomes. Middle East Investment Outreach: During UNGA, El Salvador met Saudi Eksab to explore investment in energy, logistics, agribusiness, tourism, and technology services. Local Business & Talent Hiring: A hiring report on Latin America shows El Salvador at 5% of placements in early 2026, reflecting continued demand for regional talent.

Shield of the Americas: A coalition led by the U.S. and 14 Latin American countries says it will target 24 criminal groups with sanctions and asset freezes, but experts warn the effort is also about geopolitical influence and blocking China’s economic reach. El Salvador Tech & AI: El Salvador used UNGA sidelines to showcase AI and technology modernization progress under President Nayib Bukele’s agenda, positioning public-sector upgrades as a growth lever. Business Climate & Red Tape: CIPE convened a regional forum with El Salvador and others to map barriers to economic freedom, focusing on how bureaucracy and regulation stall small businesses and informal workers. Tourism & Connectivity: Air Europa announced new flights to San Salvador starting in December 2026, adding another Europe link as El Salvador pushes tourism growth. Digital Commerce: El Salvador highlighted how Walmart-linked investment and e-commerce capabilities can help local firms reach international markets. Crypto & Adoption: New reporting points to broader Bitcoin adoption across Latin America, with El Salvador mentioned among countries seeing placement activity. Immigration Court Fight: A U.S. judge held the Trump administration in contempt for deporting an asylum seeker to El Salvador again despite multiple court orders.

Tourism & Connectivity: Air Europa says it will start flights to San Salvador in the second half of December 2026, three times a week, pitching El Salvador’s volcanoes, beaches and surfing to European travelers. Digital Commerce & Trade: El Salvador highlighted how Walmart-linked investment and e-commerce upgrades can help local firms reach international customers, positioning tech as a trade growth lever. AI & Modernization: At UN event “Seizing the Super Intelligence Opportunity,” El Salvador showcased its AI and technology modernization push, with public-sector institutions urged to evolve alongside new tools. Investment Incentives: El Salvador passed a 5-year income tax exemption for local artists and creative businesses, aiming to spur domestic creative-sector activity. Business Climate & Infrastructure: The government says it streamlined permitting and approved over $11.8B in real estate and infrastructure, while also touting new skyline development like “Reforma 150.” Security & Human Rights: The Legislative Assembly extended El Salvador’s state of exception for 30 more days to Oct. 27, amid rights concerns over arrests and alleged abuses. Regional Anti-Crime Pact: El Salvador joined the “Shield of the Americas” coalition, backing coordinated sanctions and visa restrictions targeting 24 criminal groups.

Shield of the Americas: El Salvador joined a U.S.-led coalition of 15 countries adopting coordinated sanctions and cross-border actions against 24 narco-terrorist groups, with asset freezes and visa restrictions aimed at disrupting illicit finance and criminal networks. State of Exception: The Legislative Assembly extended El Salvador’s state of exception for 30 more days, keeping constitutional guarantees suspended amid renewed human-rights concerns and reports of violence in custody. Tourism & MSMEs: The government launched Mype Turística 2026 to modernize micro and small tourism businesses with management training, digital tools, and AI support ahead of World Tourism Day. Creative Sector Tax Relief: Lawmakers approved a five-year income tax exemption for local artists and creative businesses, easing the tax burden for low- and mid-income creators and small entities. Retail Expansion: Toys “R” Us plans a Central America and Caribbean comeback, with El Salvador named as a key market in a 60-megastores rollout led from Panama’s logistics hub. Aviation Growth: Coverage highlights El Salvador’s expanding aviation sector and rising demand for pilots, cabin crew, and technicians.