According to CoinDesk, El Salvador’s President Nayib Bukele announced that a zero-deficit budget for 2025 will be presented to the Legislative Assembly on September 30, marking the first fully financed budget in decades that does not require borrowing for current spending.
Bukele said El Salvador would no longer spend more each year than it produces, and would not even borrow money to pay the interest on the inherited debt, but would pay with its own production.
Finance Secretary Jerson Posada elaborated that this is the first budget in decades without issuing any local or foreign debt.
Bukele has an overwhelming majority in the Legislative Assembly, with the Nuevas Ideas party and allies holding 57 of the 60 seats.
The budget deficit is $338 million, with total spending of $9.1 billion, for 2024. Bukele took office with a budget deficit of $1.2 billion.
El Salvador has used the U.S. dollar as legal tender since 2001 and added Bitcoin as legal tender in 2021. The NayibTracker website shows that El Salvador currently holds 5,874 Bitcoins with a total value of $331.4 million.
Bukele acknowledged that Bitcoin’s popularity is not as good as expected, but said there is still room for improvement and that there are no negative consequences.
The IMF announced in August that it had made progress in talks with Salvadoran authorities focused on strengthening public finances, boosting bank reserves, improving governance and transparency, and mitigating risks posed by Bitcoin.
