El Salvador Economy - 2006

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, is viewed as a key policy to help achieve these objectives. The trade deficit has been offset by annual remittances from Salvadorans living abroad - 16.6% of GDP in 2005 - 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.

GDP (purchasing power parity):
$34.15 billion (2005 est.)

GDP (official exchange rate):
$16.52 billion (2005 est.)

GDP - real growth rate:
2.9% (2005 est.)

GDP - per capita (PPP):
$5,100 (2005 est.)

GDP - composition by sector:
agriculture: 11.5%
industry: 23.6%
services: 64.9% (2005 est.)

Labor force:
2.81 million (2005 est.)

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

Unemployment rate:
6.5% official rate; but the economy has much underemployment (2005 est.)

Population below poverty line:
34.6% (2004 est.)

Household income or consumption by percentage share:
lowest 10%: 1.4%
highest 10%: 39.3% (2001)

Distribution of family income - Gini index:
52.5 (2001)

Inflation rate (consumer prices):
4.3% (2005 est.)

Investment (gross fixed):
15.8% of GDP (2005 est.)

Budget:
revenues: $2.26 billion
expenditures: $3.34 billion; including capital expenditures of $NA (2006 est.)

Public debt:
40.8% of GDP (2005 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:
0.7% (2005 est.)

Electricity - production:
4.48 billion kWh (2005)

Electricity - consumption:
4.768 billion kWh (2005)

Electricity - exports:
91 million kWh (2004)

Electricity - imports:
473 million kWh (2004)

Oil - production:
0 bbl/day (2003 est.)

Oil - consumption:
33,863 bbl/day (2005 est.)

Oil - exports:
NA bbl/day

Oil - imports:
NA bbl/day

Natural gas - production:
0 cu m (2003 est.)

Natural gas - consumption:
0 cu m (2003 est.)

Current account balance:
-$858 million (2005 est.)

Exports:
$3.586 billion (2005 est.)

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

Exports - partners:
US 65.6%, Guatemala 11.8%, Honduras 6.3% (2004)

Imports:
$6.678 billion (2005 est.)

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

Imports - partners:
US 46.3%, Guatemala 8.1%, Mexico 6% (2004)

Reserves of foreign exchange and gold:
$2.003 billion (2005 est.)

Debt - external:
$8.273 billion (30 June 2005 est.)

Economic aid - recipient:
$125 million of which, $53 million from US (2003)

Currency (code):
US dollar (USD)

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