Second Broad-Based Growth Development Policy Loan

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The Broad-Based Growth Development Policy Loan (DPL) constitutes the second project in a programmatic series of up to four DPLs, to support the Government's medium term development strategy in accelerating broad based, and equitable economic growth, and in contributing to the Government's objectives of reigniting growth, particularly through increased private investment and trade, reinforcing macroeconomic stability and strengthening fiscal sustainability, and, increasing the efficiency and transparency of public sector management. This second operation builds on the first operation, and focuses on addressing fiscal issues, and on strengthening the international trade and business environment, for which it will draw on findings set forth in the Country Economic Memorandum (CEM), Public Expenditure Review (PER), Dominican Republic-Central America Free Trade Agreement with the United States of America (DR-CAFTA) studies, as well as the Investment Climate Assessment. It will likewise continue to emphasize transparency, and efficiency in public spending by including follow up actions on public financial management, and procurement regulations to ensure the gradual implementation of measures as prescribed in the Country Financial Accountability Assessment (CFAA) and Country Procurement Assessment Report (CPAR). Nonetheless, risks exist, such as fiscal, political, external - i.e., sustained high oil prices or a new international recession, could negatively affect El Salvador's economy and worsen debt dynamics - as well as natural disasters, and crime and violence.