Key facts:
El Salvador ranked as the country with the third lowest inflation in the region in April.
Meanwhile, bitcoin remains a long way from El Salvador’s purchase price.
While inflation is increasing at an accelerated pace around the world, El Salvador managed to slow down its inflation between the months of March and April. It even improved one position among the nations of the area in terms of inflation rates.
The Salvadoran year-on-year inflation went from 6.7% to 6.5% from one month to the next, as can be seen by comparing the reports of both months of the Central American Monetary Council (SECMCA). These data come from the central banks of the Central American countries, in addition to the Institute of Statistics and Census of Panama.
According to these data, no other country in the region managed to lower its inflation rate in that period, although there were two that remained at levels lower than those of El Salvador: Guatemala and Panama, with 4.6% and 3.7%. respectively in the month of April.
This places El Salvador as the third economy with the lowest year-on-year inflation rate in Central America for the month of April. The country rose one place by overtaking Costa Rica, which ranked third in March and had a sharp relapse in inflation in April.
President Nayib Bukele highlighted via Twitter that an opposition media outlet in his country (El Mundo) echoed the news. About, cataloged the fact as a sign that the Salvadoran response to a global phenomenon is being “better than what many claimed.”
Indeed, criticism of Bukele abounds in the press and among local economists. Particularly economically and with greater emphasis since the adoption of bitcoin as legal tender a few months ago.
“Bitcoin has become part of the problem”
Economists such as Ricardo Castaneda, coordinator of the Central American Institute for Fiscal Studies (ICEFI) study center for El Salvador and Honduras, are part of this trend that questions the adoption of bitcoin.
Quoted by First Report, Castaneda assured that, although the The country’s financial problems were not caused by the adoption of bitcoin, the cryptocurrency has aggravated them. “Bitcoin is no longer a solution and has become part of the problem,” said the economist.
Certainly, bitcoin’s drop from its all-time highs last year (right now more than 50% off the $69,000 mark) has affected the country’s investment in the cryptocurrency.
As we have previously reported in CriptoNoticias, Bukele’s bitcoiner portfolio is at a fairly high unrealized loss. However, it cannot be considered a loss until those bitcoins are reported as being sold below their purchase price.
Furthermore, criticism of bitcoin adoption has come from all sides, regardless of the cryptocurrency’s performance in the market. The International Monetary Fund and other institutions have attacked the measure of the Salvadoran government, although the latter has remained firm in its commitment.