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El Salvador vs. Honduras

Economy

El SalvadorHonduras
Economy - overview

The smallest country in Central America geographically, El Salvador has the fourth largest economy in the region. With the global recession, real GDP contracted in 2009 and economic growth has since remained low, averaging less than 2% from 2010 to 2014, but recovered somewhat in 2015-17 with an average annual growth rate of 2.4%. Remittances accounted for approximately 18% of GDP in 2017 and were received by about a third of all households.

In 2006, El Salvador was the first country to ratify the Dominican Republic-Central American Free Trade Agreement, which has bolstered the export of processed foods, sugar, and ethanol, and supported investment in the apparel sector amid increased Asian competition. In September 2015, El Salvador kicked off a five-year $277 million second compact with the Millennium Challenge Corporation - a US Government agency aimed at stimulating economic growth and reducing poverty - to improve El Salvador's competitiveness and productivity in international markets.

The Salvadoran Government maintained fiscal discipline during reconstruction and rebuilding following earthquakes in 2001 and hurricanes in 1998 and 2005, but El Salvador's public debt, estimated at 59.3% of GDP in 2017, has been growing over the last several years.

Honduras, the second poorest country in Central America, suffers from extraordinarily unequal distribution of income, as well as high underemployment. While historically dependent on the export of bananas and coffee, Honduras has diversified its export base to include apparel and automobile wire harnessing.

Honduras's economy depends heavily on US trade and remittances. The US-Central America-Dominican Republic Free Trade Agreement came into force in 2006 and has helped foster foreign direct investment, but physical and political insecurity, as well as crime and perceptions of corruption, may deter potential investors; about 15% of foreign direct investment is from US firms.

The economy registered modest economic growth of 3.1%-4.0% from 2010 to 2017, insufficient to improve living standards for the nearly 65% of the population in poverty. In 2017, Honduras faced rising public debt, but its economy has performed better than expected due to low oil prices and improved investor confidence. Honduras signed a three-year standby arrangement with the IMF in December 2014, aimed at easing Honduras's poor fiscal position.

GDP (purchasing power parity)$56.636 billion (2019 est.)

$55.318 billion (2018 est.)

$54.005 billion (2017 est.)

note: data are in 2017 dollars
$55.825 billion (2019 est.)

$54.382 billion (2018 est.)

$52.444 billion (2017 est.)

note: data are in 2017 dollars
GDP - real growth rate2.3% (2017 est.)

2.6% (2016 est.)

2.4% (2015 est.)
4.8% (2017 est.)

3.8% (2016 est.)

3.8% (2015 est.)
GDP - per capita (PPP)$8,776 (2019 est.)

$8,616 (2018 est.)

$8,454 (2017 est.)

note: data are in 2017 dollars
$5,728 (2019 est.)

$5,672 (2018 est.)

$5,562 (2017 est.)

note: data are in 2017 dollars
GDP - composition by sectoragriculture: 12% (2017 est.)

industry: 27.7% (2017 est.)

services: 60.3% (2017 est.)
agriculture: 14.2% (2017 est.)

industry: 28.8% (2017 est.)

services: 57% (2017 est.)
Population below poverty line22.8% (2019 est.)48.3% (2018 est.)
Household income or consumption by percentage sharelowest 10%: 2.2%

highest 10%: 32.3% (2014 est.)
lowest 10%: 1.2%

highest 10%: 38.4% (2014)
Inflation rate (consumer prices)0% (2019 est.)

1% (2018 est.)

1% (2017 est.)
4.3% (2019 est.)

4.3% (2018 est.)

3.9% (2017 est.)
Labor force2.908 million (2019 est.)3.735 million (2017 est.)
Labor force - by occupationagriculture: 21%

industry: 20%

services: 58% (2011 est.)
agriculture: 39.2%

industry: 20.9%

services: 39.8% (2005 est.)
Unemployment rate7% (2017 est.)

6.9% (2016 est.)

note: data are official rates; but underemployment is high
5.6% (2017 est.)

6.3% (2016 est.)

note: about one-third of the people are underemployed
Distribution of family income - Gini index38.6 (2018 est.)

38 (2014)
52.1 (2018 est.)

45.7 (2009)
Budgetrevenues: 5.886 billion (2017 est.)

expenditures: 6.517 billion (2017 est.)
revenues: 4.658 billion (2017 est.)

expenditures: 5.283 billion (2017 est.)
Industriesfood processing, beverages, petroleum, chemicals, fertilizer, textiles, furniture, light metalssugar processing, coffee, woven and knit apparel, wood products, cigars
Industrial production growth rate3.6% (2017 est.)4.5% (2017 est.)
Agriculture - productssugar cane, maize, milk, poultry, sorghum, beans, coconuts, eggs, apples, orangessugar cane, oil palm fruit, milk, bananas, maize, coffee, melons, oranges, poultry, beans
Exports$4.662 billion (2017 est.)

$5.42 billion (2016 est.)
$8.675 billion (2017 est.)

$7.841 billion (2016 est.)
Exports - commoditiestextiles and apparel, electrical capacitors, plastic lids, raw sugar, toilet paper (2019)clothing and apparel, coffee, insulated wiring, bananas, palm oil (2019)
Exports - partnersUnited States 40%, Guatemala 15%, Honduras 15%, Nicaragua 6% (2019)United States 53%, El Salvador 8%, Guatemala 5%, Nicaragua 5% (2019)
Imports$9.499 billion (2017 est.)

$8.954 billion (2016 est.)
$11.32 billion (2017 est.)

$10.56 billion (2016 est.)
Imports - commoditiesrefined petroleum, packaged medicines, clothing, broadcasting equipment, natural gas (2019)refined petroleum, clothing and apparel, packaged medicines, broadcasting equipment, insulated wiring (2019)
Imports - partnersUnited States 30%, China 14%, Guatemala 13%, Mexico 8%, Honduras 6% (2019)United States 42%, China 10%, Guatemala 8%, El Salvador 8%, Mexico 6% (2019)
Debt - external$17.24 billion (2019 est.)

$16.712 billion (2018 est.)
$9.137 billion (2019 est.)

$8.722 billion (2018 est.)
Exchange ratesnote: the US dollar is used as a medium of exchange and circulates freely in the economy

1 (2017 est.)
lempiras (HNL) per US dollar -

23.74 (2017 est.)

22.995 (2016 est.)

22.995 (2015 est.)

22.098 (2014 est.)

21.137 (2013 est.)
Fiscal yearcalendar yearcalendar year
Public debt67.9% of GDP (2017 est.)

66.4% of GDP (2016 est.)

note: El Salvador's total public debt includes non-financial public sector debt, financial public sector debt, and central bank debt
39.5% of GDP (2017 est.)

38.5% of GDP (2016 est.)
Reserves of foreign exchange and gold$3.567 billion (31 December 2017 est.)

$3.238 billion (31 December 2016 est.)
$4.708 billion (31 December 2017 est.)

$3.814 billion (31 December 2016 est.)
Current Account Balance-$501 million (2017 est.)

-$500 million (2016 est.)
-$380 million (2017 est.)

-$587 million (2016 est.)
GDP (official exchange rate)$27.023 billion (2019 est.)$25.145 billion (2019 est.)
Credit ratingsFitch rating: B- (2017)

Moody's rating: B3 (2018)

Standard & Poors rating: B- (2018)
Moody's rating: B1 (2017)

Standard & Poors rating: BB- (2017)
Ease of Doing Business Index scoresOverall score: 65.3 (2020)

Starting a Business score: 78.6 (2020)

Trading score: 89.8 (2020)

Enforcement score: 51.9 (2020)
Overall score: 56.3 (2020)

Starting a Business score: 71.4 (2020)

Trading score: 64.3 (2020)

Enforcement score: 44.2 (2020)
Taxes and other revenues23.7% (of GDP) (2017 est.)20.3% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-2.5% (of GDP) (2017 est.)-2.7% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 9.9%

male: 8.3%

female: 12.8% (2019)
total: 10.9%

male: 7.6%

female: 17.6% (2019 est.)
GDP - composition, by end usehousehold consumption: 84.5% (2017 est.)

government consumption: 15.8% (2017 est.)

investment in fixed capital: 16.9% (2017 est.)

investment in inventories: 0% (2017 est.)

exports of goods and services: 27.6% (2017 est.)

imports of goods and services: -44.9% (2017 est.)
household consumption: 77.7% (2017 est.)

government consumption: 13.8% (2017 est.)

investment in fixed capital: 23.1% (2017 est.)

investment in inventories: 0.7% (2017 est.)

exports of goods and services: 43.6% (2017 est.)

imports of goods and services: -58.9% (2017 est.)
Gross national saving17% of GDP (2019 est.)

15.6% of GDP (2018 est.)

15% of GDP (2017 est.)
22% of GDP (2019 est.)

20.5% of GDP (2018 est.)

23.6% of GDP (2017 est.)

Source: CIA Factbook