El Salvador Economy 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.

GDP (purchasing power parity):
$35.97 billion (2007 est.)

GDP (official exchange rate):
$16.06 billion (2007 est.)

GDP - real growth rate:
3.4% (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.)

Labor force:
2.913 million (2007 est.)

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

Unemployment rate:
6.2% official rate; but the economy has much underemployment (2007 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):
4.3% (2007 est.)

Investment (gross fixed):
17% of GDP (2007 est.)

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

Public debt:
38.3% of GDP (2007 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% (2007 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 (2005)

Oil - consumption:
43,200 bbl/day (2005 est.)

Oil - exports:
5,194 bbl/day (2004)

Oil - imports:
47,310 bbl/day (2004)

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.)

Exports:
$3.96 billion (2007 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:
$8.099 billion (2007 est.)

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:
$2.314 billion (31 December 2007 est.)

Debt - external:
$9.991 billion (30 June 2007)

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