The growing confidence in Doing Business In El Salvador
The MSE Business Confidence Index for the first quarter of 2024, as prepared by Fusai, surpasses the results achieved throughout last year.
El Salvador’s economic dynamism is rising, and an improved business climate accompanies it. According to the Mype Business Confidence Index report for the first quarter of 2024, prepared by the Salvadoran Foundation for Integral Support (Fusai), entrepreneurs’ perspectives regarding the country’s economic climate and business performance have significantly improved.
The Business Confidence Index reached 105.8 points during the first quarter of 2024, signaling a positive start for micro and small enterprises (MSEs). This score surpasses previous years’ results and exceeds the fourth quarter 2023. Notably, it outperforms all scores reported last year by this index, which Fusai develops through the Mype Observatory.
The optimism reflected in this score is driven by positive near-term expectations and a better perception of the current economic situation. Specifically, the net proportion of entrepreneurs with a favorable opinion of their business performance increased by 7.7 points compared to the first quarter of 2023.
Segment-wise, small companies lead this growth, with an index of 108.5 points, followed by the subsistence and extended accumulation segments at 107.3 and 107.1, respectively. These sustained growth trends bode well for investment and production in the short term.
Overall, this positive outlook signifies sectoral solidity and is particularly inspiring for the subsistence segment. As many entrepreneurs in this segment may transition to simple accumulation entrepreneurs, there is a clear path to improving their quality of life and contributing to El Salvador’s economic growth.
The MSE Business Confidence Index forecasts continued strong performance for MSEs throughout the year. Approximately 61% of entrepreneurs expect their businesses to strengthen by the end of 2024. However, it’s important to be aware of the challenges, such as increased competition, decreased demand, rising prices, and difficulties accessing financing. By understanding these challenges, we can better prepare and manage them.
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