Economy in El Salvador

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Economy—overview: In 1997 the government emphasized a fixed exchange rate along with conservative monetary and fiscal policies to promote foreign investment. Inflation fell to an unprecedented low of 2%. Exports reached a record level and were the main engine of growth. Productivity in other sectors remained weaker however. For the last few years El Salvador has experienced sizable deficits in both its trade and its fiscal accounts. The trade deficit has been offset by remittances from the large number of Salvadorans living abroad and from external aid. The deficit is expected to increase in 1998 as imports continue to rise. San Salvador is stepping up its privatization efforts in 1998 to increase revenues. Late in 1997 the legislative assembly approved a privatization law that will facilitate the sale of the state-owned telephone company sometime in 1998. The government also plans to privatize pension funds later in the year.

GDP: purchasing power parity—$17.8 billion (1997 est.)

GDP—real growth rate: 4% (1997 est.)

GDP—per capita: purchasing power parity—$3 000 (1997 est.)

GDP—composition by sector:

agriculture: 15%

industry: 24%

services: 61% (1997 est.)

Inflation rate—consumer price index: 2% (1997)

Labor force:

total: 2.26 million (1997 est.)

by occupation: agriculture 40% commerce 16% manufacturing 15% government 13% financial services 9% transportation 6% other 1%

Unemployment rate: 7.7% (1997 est.)

Budget:

revenues: $1.75 billion

expenditures: $1.82 billion including capital expenditures of $317 million (1997 est.)

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

Industrial production growth rate: 7% (1997 est.)

Electricity—capacity: 900 000 kW (1996)

Electricity—production: 3.5 billion kWh (1997)

Electricity—consumption per capita: 603 kWh (1997 est.)

Agriculture—products: coffee sugarcane corn rice beans oilseed cotton sorghum; beef dairy products; shrimp

Exports:

total value: $1.96 billion (f.o.b. 1997 est.)

commodities: coffee sugar; shrimp; textiles

partners: US Guatemala Germany Costa Rica Honduras

Imports:

total value: $3.5 billion (c.i.f. 1997 est.)

commodities: raw materials consumer goods capital goods fuels

partners: US Guatemala Mexico Panama Venezuela Japan

Debt—external: $2.6 billion (yearend 1997)

Economic aid:

recipient: ODA $763 million (1996)

note: US has committed $280 million in economic assistance to El Salvador for 1995-97 (excludes military aid)

Currency: 1 Salvadoran colon (C) = 100 centavos

Exchange rates: Salvadoran colones (C) per US$1 (end of period)—8.755 (January 1998-1995) 8.750 (1994) 8.670 (1993)

note: as of 1 June 1990 the rate is based on the average of the buying and selling rates set on a weekly basis for official receipts and payments imports of petroleum and coffee exports; prior to that date a system of floating was in effect

Fiscal year: calendar year

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