El Salvador Economy 2007

Economy - overview:
The smallest country in Central America, El Salvador has the third largest economy, but growth has been minimal in recent years. Hoping to stimulate the sluggish economy, the government is striving to open new export markets, encourage foreign investment, and modernize the tax and healthcare systems. Implementation in 2006 of the Central America-Dominican Republic Free Trade Agreement, which El Salvador was the first to ratify, has strengthened an already positive export trend. The trade deficit has been offset by annual remittances from Salvadorans living abroad - equivalent to more than 16% of GDP - and external aid. With the adoption of the US dollar as its currency in 2001, El Salvador has 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. 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.

GDP (purchasing power parity):
$33.66 billion (2006 est.)

GDP (official exchange rate):
$15.16 billion (2006 est.)

GDP - real growth rate:
4.2% (2006 est.)

GDP - per capita (PPP):
$4,900 (2006 est.)

GDP - composition by sector:
agriculture: 10.1%
industry: 29.9%
services: 60% (2006 est.)

Labor force:
2.875 million (2006 est.)

Labor force - by occupation:
agriculture: 17.1%
industry: 17.1%
services: 65.8% (2003 est.)

Unemployment rate:
6% official rate; but the economy has much underemployment (2006 est.)

Population below poverty line:
35.2% (2005 est.)

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):
4% (2006 est.)

Investment (gross fixed):
16.1% of GDP (2006 est.)

Budget:
revenues: $2.82 billion
expenditures: $2.94 billion (FY07 est.)

Public debt:
41.1% of GDP (2006 est.)

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

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

Industrial production growth rate:
2% (2006 est.)

Electricity - production:
5.293 billion kWh (2006)

Electricity - consumption:
5.204 billion kWh (2006)

Electricity - exports:
95.5 million kWh (2006)

Electricity - imports:
322 million kWh (2005)

Oil - production:
0 bbl/day (2004 est.)

Oil - consumption:
43,000 bbl/day (2004 est.)

Oil - exports:
NA bbl/day

Oil - imports:
NA bbl/day

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

Natural gas - production:
0 cu m (2005 est.)

Natural gas - consumption:
0 cu m (2005 est.)

Current account balance:
$-854.9 million (2006 est.)

Exports:
$3.567 billion (2006 est.)

Exports - commodities:
offshore assembly exports, coffee, sugar, shrimp, textiles, chemicals, electricity

Exports - partners:
US 49.6%, Guatemala 14.4%, Honduras 8.8%, Nicaragua 5% (2006)

Imports:
$7.257 billion (2006 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)

Economic aid - recipient:
$199.4 million of which $55 million from US (2005)

Reserves of foreign exchange and gold:
$1.899 billion (2006 est.)

Debt - external:
$7.518 billion (2006 est.)

Stock of direct foreign investment - at home:
$4.377 billion (2006 est.)

Stock of direct foreign investment - abroad:
$293 million (2006 est.)

Market value of publicly traded shares:
$3.623 billion (2005)

Currency (code):
US dollar (USD)

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