President Nayib Bukele revealed that he will present a self-financing budget proposal to El Salvador's Legislative Assembly, meaning the government will not issue debt to finance its operations in 2025. Bukele stressed that this would be the first time this has happened in decades, emphasizing the importance of independence and autonomy for the country.

President Nayib Bukele Announces El Salvador Will Not Issue Debt to Finance 2025 Budget

President Nayib Bukele has unveiled part of his plan to boost El Salvador's economy, one of the biggest goals proposed for his second term. In a speech marking the country's independence day, Bukele announced that next year's budget will be self-funded, with no debt issuance to keep the government afloat.

At the event, Bukele stated:

I declare that on September 30, we will present to the Legislative Council, for the first time in decades, a fully funded first budget, without having to issue a single cent of debt for current expenditures.

Bukele stated that El Salvador would not even pay interest on its debt by issuing more debt during this time, stressing that any payments would be made with its own resources.

Bukele also emphasized the benefits of this frugal approach, assessing that while these benefits will not come immediately, they will be more evident in a "strong economy and a truly independent country not only because it has peace, freedom and security, but also because it will be financially and fiscally independent."

While Bukele's first term focused on fighting the criminal gangs that had taken control of the country, he explained that his second term would focus on improving the country's economy. To that end, he has attracted more than $1.6 billion in private investment and has taken steps to combat rising inflation.

Global markets reacted positively to the announcement, with El Salvador's bonds rising to their highest level since 2021. However, El Salvador still has a heavy public debt burden, amounting to more than $31 billion, including pension fund obligations.

What do you think of Bukele's zero-deficit budget proposal? Let us know in the comments below.
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