LatinNews Daily - 23 December 2021

* El Salvador’s 84-member unicameral legislature, which is controlled by the ruling Nuevas Ideas, has approved the government’s proposed 2022 budget for US$7.97bn, up US$400m on the 2021 budget. According to the legislature, 43.2% of budget spending will go on health, education, and security, equivalent to 11.9% of GDP. It adds that US$1.47bn has been assigned to education, up 9.3% on the amount approved in 2021 and equivalent to 5.5% of GDP. Meanwhile health will receive US$1.08bn (up 4.4%), while security will receive US$890m (up 4.0%). Under the budget, the deficit would come in at US$498.4m – on 21 December the legislature voted to authorise the executive to issue bonds or approve loans to cover this. The budget has been criticised by economists such as Ricardo Castaneda of the Guatemala-based think tank Central American Institute of Fiscal Studies (Icefi), who warns it is unrealistic in terms of estimates for income and spending. Castaneda also recommends that the resources to cover the fiscal deficit should come from liquidating the US$150m trust fund set up by the government for the cryptocurrency bitcoin, following legislation approved in June making bitcoin legal tender alongside the US dollar, the country’s official currency, as of September.

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