Expenditure Growth To Slow Fiscal Adjustment In El Salvador

• El Salvador’s budget deficit will narrow modestly in the coming quarters as increased spending on security and public health will partially offset higher revenue growth.
• Fitch has revised up its fiscal deficit forecast for 2020 and 2021 to 3.2% of GDP and 3.0%, respectively, up from 3.0% and 2.9% previously, due to greater than expected expenditure growth in H219.
• A significant slowdown in US growth poses downside risks to the forecast, as it would undercut economic activity, and thereby revenue growth, in El Salvador

(Source: Fitch)