El Salvador’s transformation: less violence, more investment and falling poverty under Bukele

El Salvador is undergoing a profound economic and social transformation under President Nayib Bukele, with the dramatic reduction in violent crime increasingly being accompanied by stronger economic activity, rising investment, growing tourism and a decline in poverty.

The country still faces significant structural challenges, including relatively low income levels and high public debt. However, recent figures point to a notable change in economic momentum after years of comparatively weak growth.

Economic growth accelerates

El Salvador’s economy grew by around 4% in 2025, exceeding several international forecasts. Growth is expected to remain above the country’s long-term historical average in 2026.

The change is particularly significant given that the economy expanded by an average of only around 2.1% per year between 2000 and 2024, according to World Bank data.

Private investment has also become an increasingly important driver. Improved security conditions have created a more predictable environment for businesses, particularly small and medium-sized companies that previously faced significant pressure from criminal gangs and extortion.

Poverty continues to fall

Economic improvements have coincided with a decline in poverty. According to World Bank estimates, the international poverty rate fell from around 29.6% in 2024 to 28.4% in 2025.

The reduction is particularly relevant in a country where poverty had remained a persistent challenge despite years of economic growth.

The trend is also visible beyond income levels. Improvements in access to basic services, healthcare, food security and housing are contributing to a reduction in multidimensional poverty, although important inequalities remain.

Children and women continue to face higher levels of poverty than other groups, meaning that the Government still faces the challenge of ensuring that economic growth reaches the most vulnerable sections of society.

Security becomes an economic asset

The most striking transformation has taken place in public security.

Under Bukele, the Government has implemented an aggressive strategy against criminal gangs that has resulted in a dramatic decline in homicides. El Salvador, once considered one of the world's most dangerous countries, has recorded homicide rates that are now comparable with those of some developed nations.

The security strategy has been heavily criticised by international human rights organisations because of mass arrests, alleged abuses and concerns over due process. Nevertheless, the reduction in violence has had a clear impact on everyday economic activity.

For businesses, particularly small retailers and entrepreneurs, the decline in extortion and gang pressure has meant that they can operate with greater certainty and fewer security-related costs.

This change has also contributed to improving the country's investment climate.

Tourism takes off

Tourism has emerged as one of the clearest beneficiaries of El Salvador's improved security image.

The country has attracted an increasingly large number of international visitors, while destinations that were previously considered too dangerous for many travellers have become part of a growing tourism industry.

The Government has actively promoted El Salvador as a new destination in Central America, highlighting its beaches, surfing, volcanoes and cultural heritage.

The arrival of more visitors is creating opportunities for hotels, restaurants, transport companies, retailers and small businesses, strengthening one of the sectors with the greatest potential for employment.

A new image for El Salvador

The transformation has also changed El Salvador's international image.

For decades, the country was associated with gang violence, insecurity and emigration. Bukele's security policies have radically altered that perception, turning El Salvador into one of the most closely watched political and economic experiments in Latin America.

The President has become a highly influential figure among sectors that see his security strategy as an example of what can be achieved through a tough approach to organised crime.

At the same time, his Government continues to face strong criticism from human rights organisations and international institutions over the methods used to achieve the security improvements.

The economic challenge begins now

The biggest challenge for Bukele is increasingly shifting from security to economic development.

Reducing violence has removed one of the country's most important barriers to investment and business activity. The next step is to transform that improvement into higher productivity, better salaries, more formal employment and sustained reductions in poverty.

El Salvador still has a relatively low per-capita income compared with countries such as Spain or the United States, while public debt remains high and structural weaknesses persist.

But the direction of several key indicators is changing.

Crime is dramatically lower, tourism is expanding, investment is gaining momentum and poverty is falling. For a country that spent decades struggling with insecurity and weak economic growth, the combination represents a significant change.

Bukele's next test will be whether the security transformation can be converted into a long-term economic transformation, creating enough opportunities for Salvadorans and ensuring that the benefits of the new environment extend beyond the country's rapidly growing tourism and investment sectors.