El Salvador Economy Profile 2008

Economy - overview

The smallest country in Central America, El Salvador has the third largest economy, but growth has been modest in recent years. Robust growth in non-traditional exports have offset declines in the maquila exports, while remittances and external aid offset the trade deficit from high oil prices and strong import demand for consumer and intermediate goods. El Salvador leads the region in remittances per capita with inflows equivalent to nearly all export income. Implementation in 2006 of the Central America-Dominican Republic Free Trade Agreement (CAFTA), which El Salvador was the first to ratify, has strengthened an already positive export trend. With the adoption of the US dollar as its currency in 2001, El Salvador lost control over monetary policy and must concentrate on maintaining a disciplined fiscal policy. The current government has pursued economic diversification, with some success in promoting textile production, international port services, and tourism through tax incentives. It is committed to opening the economy to trade and investment, and has embarked on a wave of privatizations extending to telecom, electricity distribution, banking, and pension funds. In late 2006, the government and the Millennium Challenge Corporation signed a five-year, $461 million compact to stimulate economic growth and reduce poverty in the country's northern region through investments in education, public services, enterprise development, and transportation infrastructure.

GDP (purchasing power parity)

$35.97 billion (2007 est.)

GDP (official exchange rate)

$20.23 billion (2007 est.)

GDP - real growth rate

4.7% (2007 est.)

GDP - per capita (PPP)

$5,200 (2007 est.)

GDP - composition by sector

agriculture: 10.2%
industry: 29.3%
services: 60.5% (2007 est.)

Population below poverty line

30.7% (2006 est.)

Household income or consumption by percentage share

lowest 10%: 0.7%
highest 10%: 38.8% (2002)

Inflation rate (consumer prices)

4.9% (2007 est.)

Investment (gross fixed)

17% of GDP (2007 est.)

Labor force

2.87 million (2007 est.)

Labor force - by occupation

agriculture: 19%
industry: 23%
services: 58% (2006 est.)

Unemployment rate

6.6% official rate; but the economy has much underemployment (2007 est.)

Distribution of family income - Gini index

52.4 (2002)

Budget

revenues: $3.464 billion
expenditures: $3.605 billion (2007 est.)

Public debt

37.9% of GDP (2007 est.)

Industries

food processing, beverages, petroleum, chemicals, fertilizer, textiles, furniture, light metals

Industrial production growth rate

2% (2007 est.)

Electricity - production

5.316 billion kWh (2006)

Electricity - consumption

5.319 billion kWh (2006)

Electricity - exports

111.1 million kWh (2007)

Electricity - imports

38.6 million kWh (2007)

Oil - production

0 bbl/day (2005)

Oil - consumption

43,200 bbl/day (2005 est.)

Oil - imports

45,210 bbl/day (2006)

Oil - exports

4,963 bbl/day (2006)

Oil - proved reserves

0 bbl (1 January 2006 est.)

Natural gas - production

0 cu m (2005 est.)

Natural gas - consumption

0 cu m (2005 est.)

Natural gas - exports

0 cu m (2005 est.)

Natural gas - imports

0 cu m (2005)

Natural gas - proved reserves

0 cu m (1 January 2006 est.)

Current Account Balance

-$929 million (2007 est.)

Agriculture - products

coffee, sugar, corn, rice, beans, oilseed, cotton, sorghum; beef, dairy products; shrimp

Exports

$3.98 billion (2007 est.)

Exports - commodities

offshore assembly exports, coffee, sugar, shrimp, textiles, chemicals, electricity

Exports - partners

US 49.5%, Guatemala 14.4%, Honduras 8.8%, Nicaragua 5% (2006)

Imports

$8.667 billion (2007 est.)

Imports - commodities

raw materials, consumer goods, capital goods, fuels, foodstuffs, petroleum, electricity

Imports - partners

US 32.2%, Guatemala 9.3%, Mexico 7.4%, Germany 6.3%, China 4.7% (2006)

Reserves of foreign exchange and gold

$2.198 billion (31 December 2007 est.)

Debt - external

$5.444 billion (December 2007)

Stock of direct foreign investment - at home

$5.372 billion (September 2007)

Stock of direct foreign investment - abroad

$291.2 million (September 2007)

Market value of publicly traded shares

$3.623 billion (2005)

Economic aid - recipient

$267.6 million of which $55 million from US (2005)

Currency (code)

US dollar (USD)

Exchange rates

the US dollar became El Salvador's currency in 2001

Fiscal year

calendar year