Before officially declaring bitcoin as legal tender in the country, El Salvador has recorded a considerable jump in the economy. According to the Central Reserve Bank (BCR), the Salvadoran economy grew by 24.5 percent in the second quarter of 2021.
Driven by the lodging and services sectors and manufacturing industry, El Salvador has reversed the sharp decline that the economy registered in the last twelve months. In the second quarter of 2020 alone, the country had a 19.7% drop in the Gross Domestic Product (GDP).
Although the annual GDP projection presented by the BCR for 2021 is 9%, the 24.5% jump in the quarter attests to the country’s economic recovery that has decided to adopt bitcoin as legal tender.
El Salvador’s economy grows
El Salvador is the first country to declare Bitcoin as legal tender. The law establishing the change in monetary regime went into effect on September 7, 2021, shortly after the government reported 24.5% growth in the economy.
Like other countries around the world, El Salvador’s economy has been devastated by the covid-19 crisis over the last twelve months. With the tourism sector suffering, the Central American country has seen an important recovery in the lodging and services category.
With an economy that jumped nearly 25% between April and June 2021, the service sector is the most grown in El Salvador. In some categories, such as artistic, there was a 164% variation in the period, corroborating the strengthening of the Salvadoran economy.
In the second quarter of 2021 alone, El Salvador’s lodging and services category rose 66.66%. Meanwhile, the manufacturing industry grew 51.8% in the same period.