Caribbean & Central America - November 2025

The number of Salvadoreans living in extreme poverty increased from 588,917 to 610,272 year-on-year from 2023-2024, equivalent to a 3.63% increase, according to statistics from the national bank (BCR).

This means that 9.08% of Salvadorean households were living in extreme poverty in 2024, meaning that they couldn’t afford a basic basket of goods. On the other hand, the number of people living in poverty fell from 1.33m in 2023 to 1.20m in 2024. As a result, a further 18.9% of Salvadorean households were living in poverty in 2024, meaning that they couldn’t afford a wider basket of goods. This mixed picture will be a concern for President Nayib Bukele, who promised to boost the economy during his second term in office, which started in June 2024, but his government has struggled to get a handle on inflation and a rising cost of living, which have made it more difficult for people to afford basic necessities as salaries have lagged behind. 

However, there are some signs that Bukele is taking action, with the 2026 budget proposal presented to congress in early October worth US$10.56bn, up 9.2% on this year. The education budget was up 6.9% to US$1.54bn, while the health budget was boosted by 12.3% to US$1.33bn, with extra funds for infrastructure and medication. There are also some measures designed to deal with the rising cost of living, including efforts to boost basic grain production via an agriculture bonus (for which US$46.6m has been assigned), while US$238.7m has been allocated to finance various subsidies including liquid petroleum gas (US$114.6m), public transport (US$60.0m), and electricity (US$64.1m).

It is not clear, however, whether the sums involved will enable the kind of far-reaching efforts needed to better support the poorest Salvadoreans. And these households are also under increasing pressure from a new 1% tax on remittances imposed by the US government in July, which will likely result in a reduction in the total value of remittances per year. In addition, US President Donald Trump has shut down the US Agency for International Development (Usaid), which supported various programmes designed to help the most vulnerable Salvadoreans. As a result, it is likely that more households will fall into extreme poverty as external sources of support are diminished and government spending struggles to make up for the shortfall.