Salvadoran presidential field narrows to two opposition candidates ahead of 2019 vote; business, fiscal policy changes likely

04 December 2018

China's President Xi Jinping (left) and El Salvador's President Salvador Sánchez Cerén inspect Chinese honour guards during a welcome ceremony in the Great Hall of the People in Beijing on 1 November 2018. Source: Wang Zhao/AFP/Getty Images

Key Points

  • Front-running opposition candidates are unlikely to hinder passage of the 2019 government budget, required before Congress breaks for recess on 21 December.
  • Priorities for the president-elect will include fiscal changes, job creation measures, and security responses.
  • Diplomatic relations with China and the United States over migration, aid, and investment issues will influence foreign investment levels for the next administration.


The incumbent Farabundo Marti for National Liberation Front (Frente Farabundo Martí para la Liberación Nacional: FMLN), represented by Hugo Martínez, polled a distant third at 7.2% behind right-leaning Grand Alliance for National Unity (Gran Alianza por la Unidad Nacional: GANA), the third-largest party in the Legislative Assembly.

GANA, supported by 28.9% of poll respondents, is fronting presidential candidate former San Salvador mayor Nayib Bukele. The lead opposition party, the right-leaning National Republican Alliance (Alianza Republicana Nacionalista: ARENA), fielding supermarket magnate Carlos Calleja, received 16.8% support.

Under contention is the best approach to stabilise El Salvador's rising debt obligations, improve its security environment, and stimulate economic growth with an eye to reigning in persistent migrant outflow to the United States. Incumbent President Salvador Sánchez Cerén has faced stiff opposition and entrenched political polarisation in the legislative assembly that has hindered his administration's efforts to address fiscal weaknesses including an indebted pension system and periodic liquidity shortfalls. IHS Markit expects GDP growth to remain stable at 2.27% of GDP in 2018 and 2.26% in 2019.

Fiscal management strategies lead campaign issues

GANA's Bukele has campaigned on a social welfare platform, proposing to reverse pension reforms implemented under the previous administration that he claims favoured pension fund managers over contributors. Bukele stated his administration will not issue business investment incentives and will oppose legislation establishing special economic or free-trade zones.

Instead, he favours the creation of a USD300-million productive credit fund through private banks to facilitate formalisation of small and medium-sized unregistered businesses, arguing formalisation of El Salvador's informal economy in a manner like that recently implemented in Honduras will expand the tax base and increase government revenues.

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