| Date - Field | ElSalvador - Economy - overview |
2008 January
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. |
2007 January
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 strenthened an already positive export trend. The trade deficit has been offset by annual remittances from Salvadorans living abroad - equivalent to more than 15% 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. |
2006 January
Economy - overview | GDP per capita is roughly half that of Brazil, Argentina, and Chile, and the distribution of income is highly unequal. The government is striving to open new export markets, encourage foreign investment, modernize the tax and healthcare systems, and stimulate the sluggish economy. Implementation of the Central America-Dominican Republic Free Trade Agreement, ratified by El Salvador in 2004, 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% of GDP in 2004 - and external aid. With the adoption of the US dollar as its currency, El Salvador has lost control over monetary policy and must concentrate on maintaining a disciplined fiscal policy. |
2005 January
Economy - overview | GDP per capita is roughly half that of Brazil, Argentina, and Chile, and the distribution of income is highly unequal. The government is striving to open new export markets, encourage foreign investment, modernize the tax and healthcare systems, and stimulate the sluggish economy. Implementation of the Central America-Dominican Republic Free Trade Agreement, ratified by El Salvador in 2004, 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% of GDP in 2004 - and external aid. With the adoption of the US dollar as its currency, El Salvador has lost control over monetary policy and must concentrate on maintaining a disciplined fiscal policy. |
2004 January
Economy - overview | With the adoption of the US dollar as its currency, El Salvador has lost control over monetary policy and must concentrate on maintaining a disciplined fiscal policy. GDP per capita is roughly only half that of Brazil, Argentina, and Chile, and the distribution of income is highly unequal. The trade deficit has been offset by annual remittances of almost $2 billion from Salvadorans living abroad and external aid. The government is striving to open new export markets, encourage foreign investment, modernize the tax and healthcare systems, and stimulate the sluggish economy. |
2003 January
Economy - overview | In recent years, this Central American economy has been suffering from a weak tax collection system, factory closings, the aftermaths of Hurricane Mitch of 1998 and the devastating earthquakes of early 2001, and weak world coffee prices. On the bright side, inflation has fallen to single digit levels, and total exports have grown substantially. The trade deficit has been offset by annual remittances of almost $2 billion from Salvadorans living abroad and by external aid. The US dollar is now the legal tender. Because competitor countries have fluctuating exchange rates, El Salvador must face the challenge of raising productivity and lowering costs. |
2002 January
Economy - overview | El Salvador is a struggling Central American economy which has been suffering from a weak tax collection system, factory closings, the aftermaths of Hurricane Mitch of 1998 and the devastating earthquakes of early 2001, and weak world coffee prices. On the bright side, in recent years inflation has fallen to single digit levels, and total exports have grown substantially. The trade deficit has been offset by remittances (an estimated $1.6 billion in 2000) from Salvadorans living abroad and by external aid. As of 1 January 2001, the US dollar was made legal tender alongside the colon. Growth in 2002 will depend largely on the speed of recovery in the US. |
2001 January
Economy - overview | El Salvador is a struggling Central American economy which has been suffering from a weak tax collection system, factory closings, the aftermaths of Hurricane Mitch of 1998 and the devastating earthquakes of early 2001, and weak world coffee prices. On the bright side, in recent years inflation has fallen to single digit levels, and total exports have grown substantially. The trade deficit has been offset by remittances (an estimated $1.6 billion in 2000) from Salvadorans living abroad and by external aid. As of 1 January 2001, the US dollar was made legal tender alongside the colon. |
2000 January
Economy - overview | El Salvador is a poor Central American economy which has been suffering from a weak tax collection system, factory closings, the aftermath of Hurricane Mitch, and weak world coffee prices. On the bright side, in recent years inflation has fallen to single digit levels, and total exports have grown substantially. The substantial trade deficit has been offset by remittances from the large number of Salvadorans living abroad and from external aid. |
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This page was last updated on 22 July, 2008 |
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