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The Salvadoran Economy
Quarterly Gross Domestic Product (Constant Prices 1990)
Figures in Million of $US
Percentage changes greater than 200 are omitted
Source: Banco Central de Reserva de El Salvador
Temporary Gap
The behavior of the economic activity is closely linked
to the economic performance of the United States
since they are the main export market (50%), and
because of family remittances sent to El Salvador
from Salvadorans residing in the United States (17%
of the GDP).
Regarding the behavior of the main macroeconomic
variables in 2009, the performance oscillated around
7%, deflation 1%, public finances deficit was over
3.1%, and public debt 35.7% of the GDP.
The foreign sector registers a chronic commercial
deficit, situated at 23% of the GDP; with a fall of
imports of (18%) and exports of (19%) after years of
growth of 12% annually, thanks to CAFTA.
Immigrants’ remittances are vital to the Salvadoran
economy as a counter part to the commercial deficit.
Due to the freezing of the US economy, the most
important country to El Salvador with more than
2.3 million Salvadorans living there, remittances
have been reduced by 8%, but they still represent
somewhere around 15% of the GDP.
Foreign Direct Investment has fallen after having
positive performance, especially, in 2007 with the
acquisition of national banks by foreign investors
exceeding $USD1, 400 million dollars.
GDP
Since 2005 El Salvador has had a clear reactivation
of its economy with growth rates above 4%. In 2007
the GDP increased 4.7%, reaching $USD 20, 287
million. This favorable behavior has been promoted
by the primary sector, which registered an increase
of 8.6%, thanks to the international increase of
coffee prices, principal export product of the country;
the increase of sugar production and tuna fish
exports. Exportation of Agro-feeding products to the
U.S. market has had a significant increase, since the
signing of CAFTA in 2006. In 2008 it was 2.5%.