El Salvador President Nayib Bukele to Present Debt-Free Budget for 2025

As a researcher with years of experience studying fiscal policies and economic development in Central America, I find President Bukele’s announcement of a deficit-free 2025 budget for El Salvador to be a noteworthy step towards financial independence. The progress made from the $1.2 billion budget deficit when he took office in 2019 to a projected deficit-free budget next year is nothing short of impressive.

Nayib Bukele, the president of El Salvador, announced his intention to present a budget for the year 2025 that does not have any deficits to the Legislative Assembly.

As an analyst, I’m sharing a significant statement made by President Bukele during the celebration of El Salvador’s 203rd independence anniversary. For the first time in decades, he has announced that we will submit a fully self-financed budget to the Legislative Assembly on September 30th. This means, without borrowing a single cent for current spending. His vision is clear: El Salvador will cease to spend more than it generates annually. Moreover, instead of borrowing to cover the interest on inherited debts, we aim to pay them off using our own production.

He further stated that the future will bring about a stronger nation, free from external influence, as it gains both financial self-sufficiency and autonomy in fiscal matters. Not only will this ensure greater liberty and stability, but it will also mean passing down an economically thriving country to future generations.

As a crypto investor, I’m thrilled to share that I recently learned about El Salvador’s exciting financial move. Their Finance Minister, Jerson Posada, announced that it will be quite some time since the country won’t issue a single penny of debt, whether local or foreign – a truly remarkable shift! (Referenced from Diario El Salvador)

In the Legislative Assembly, Bukele’s party, Nuevas Ideas, along with its allies, holds a substantial majority, claiming 57 out of the 60 total seats. The party itself has 54 seats, while its partners account for the remaining 3.

The 2024 budget gap was $338 million on total spending of $9.1B, according to an official document published by the Assembly. The budget deficit when Bukele took office, in 2019, was $1.2 billion.

In 2001, El Salvador stopped having the ability to produce its own currency and instead uses the U.S. dollar as official money. Notably, it made headlines by adopting Bitcoin as a legitimate form of currency in 2021.

As an analyst, I’ve been examining the matter of El Salvador’s bitcoin holdings, and while there are no officially published documents, a site known as NayibTracker has compiled a portfolio based on President Bukele’s announcements. According to their data, the Central American nation currently owns approximately 5,874 bitcoins, equating to a total value of around $331.4 million. This portfolio represents an impressive unrealized gain of about 32.6%, or roughly $43 million.

Last month, Bukele admitted that Bitcoin didn’t achieve the broad acceptance we anticipated… It had room for improvement, and there’s potential for enhancements, though so far it hasn’t caused any harm.

In August, representatives from the International Monetary Fund reported positive advancements in their talks with Salvadoran officials concerning the potential establishment of an IMF-backed program. The focus of this program is geared towards strengthening public finances, reinforcing bank reserve cushions, enhancing governance and transparency, and minimizing risks associated with Bitcoin usage.