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The Economy of El Salvador

Salvadoran Economy

El Salvador's map

Economy - overview: The smallest country in Central America, El Salvador has the third largest economy, but growth has been modest in recent years. Economic growth will decelerate in 2009 due to the global slowdown and to El Salvador's dependence on exports to the US and remittances from the US. El Salvador leads the region in remittances per capita with inflows equivalent to nearly all export income. In 2006 El Salvador was the first country to ratify the Central America-Dominican Republic Free Trade Agreement (CAFTA). CAFTA has bolstered the export of processed foods, sugar, and ethanol, and supported investment in the maquila sector. The SACA administration has sought to diversify the economy, focusing on regional transportation and tourism. El Salvador has promoted an open trade and investment environment, 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. 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.

GDP:

GDP - real growth rate: 3.2% (2008 est.) 4.7% (2007 est.) 4.2% (2006 est.)

GDP - per capita:

GDP - composition by sector: agriculture: 11.2% industry: 24.7% services: 64.1% (2008 est.)

Population below poverty line:

Household income or consumption by percentage share: lowest 10%: 0.7% highest 10%: 38.8% (2002)

Distribution of family income - Gini index: 52.4 (2002)

Inflation rate (consumer prices):

Labor force: 2.958 million (2008 est.)

Labor force - by occupation: agriculture: 19% industry: 23% services: 58% (2006 est.)

Unemployment rate: 6.3% official rate; but the economy has much underemployment (2008 est.)

Budget: revenues: $3.928 billion expenditures: $4.226 billion (2008 est.)

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

Industrial production growth rate: 3.8% (2008 est.)

Electricity - production: 5.338 billion kWh (2007 est.)

Electricity - production by source:

Electricity - consumption: 4.426 billion kWh (2007 est.)

Electricity - exports: 8.64 million kWh (2007 est.)

Electricity - imports: 11.08 million kWh (2007 est.)

Oil - production: 0 bbl/day (2005)

Oil - consumption: 44,330 bbl/day (2006 est.)

Oil - exports: 4,963 bbl/day (2006)

Oil - imports: 45,210 bbl/day (2006)

Oil - proved reserves: 0 bbl (1 January 2006 est.)

Natural gas - production: 0 cu m (2007 est.)

Natural gas - consumption: 0 cu m (2007 est.)

Natural gas - exports: 0 cu m (2007 est.)

Natural gas - imports: 0 cu m (2007 est.)

Natural gas - proved reserves: 0 cu m (1 January 2006 est.)

Agriculture - products: coffee, sugar, corn, rice, beans, oilseed, cotton, sorghum; beef, dairy products

Exports: $4.55 billion (2008 est.)

Exports - commodities: offshore assembly exports, coffee, sugar, textiles and apparel, gold, ethanol, chemicals, electricity, iron and steel manufactures

Exports - partners: US 51%, Guatemala 13.6%, Honduras 11.2%, Nicaragua 5.5% (2007)

Imports: $9.75 billion (2008 est.)

Imports - commodities: raw materials, consumer goods, capital goods, fuels, foodstuffs, petroleum, electricity

Imports - partners: US 35.7%, Mexico 9.8%, Guatemala 8.5%, China 4.7% (2007)

Debt - external: $9.422 billion (31 November 2008 est.)

Economic aid - recipient:

Currency:

Currency code:

Exchange rates: the US dollar became El Salvador's currency in 2001

Fiscal year: