Economy of El Salvador
| Currency |
1 Salvadoran colón (₡) = 100 centavos; US dollar circulates as legal tender since 1 January 2001 |
|---|---|
| calendar year | |
| Statistics | |
| GDP |
(PPP) |
| GDP rank | 106th (2017 est. PPP) |
|
GDP growth
|
 1.5% (2012 est.) |
|
GDP by sector
|
agriculture: 10.5%; industry: 30.0%; services: 59.4% (2012 est.) |
 2.4% (2012 est.) |
|
|
Population below poverty line
|
30.7% (2009 est.) |
| .485 | |
|
Labor force
|
2.593 million (2012 est.) |
|
Labor force by occupation
|
agriculture: 21%; industry: 20%; services: 58% (2011 est.) |
| Unemployment | 6.9% (2012 est.) |
|
Main industries
|
food processing, beverages, petroleum, chemicals, fertilizer, textiles, furniture, light metals |
| 95th (2017) | |
| External | |
| Exports | $5.804 billion (2012 est.) |
|
Export goods
|
offshore assembly exports, coffee, sugar, textiles and apparel, gold, ethanol, chemicals, electricity, iron and steel manufactures |
|
Main export partners
|
 United States 45.8% Guatemala 14.9% Honduras 9.6% Nicaragua 5.8% (2012 est.) |
| Imports | $10.44 billion (2012 est.) |
|
Import goods
|
raw materials (such as thread from US [1]), consumer goods, capital goods, fuels, foodstuffs, petroleum, electricity |
|
Main import partners
|
United States 34.4% Guatemala 10.8% Mexico 6.8% Colombia 5.7% China 5.5% Germany 4.0% (2012 est.) |
|
Gross external debt
|
$12.84 billion (31 December 2012 est.) |
| Public finances | |
| Revenues | $4.835 billion (2012 est.) |
| Expenses | $5.534 billion, (2012 est.) |
| Economic aid | $300 million (2010 est.) |
| BB (Domestic) BB- (Foreign) AAA (T&C Assessment) (Standard & Poor's) |
|
|
Foreign reserves
|
US$2.623 billion (31 December 2012 2011) |
|
All values, unless otherwise stated, are in US dollars. |
|
1 Salvadoran colón (₡) = 100 centavos;
(PPP)$57.28 billion (2017 est.) (PPP per capita) $7,600
Compared to other developing countries, El Salvador has experienced relatively low rates of GDP growth. Rates have not risen above the low single digits in nearly two decades – part of broader environment of macroeconomic instability which the integration of the US dollar has done little to improve. One problem that the Salvadoran economy faces is the inequality in the distribution of income. In 2011, El Salvador had a Gini Coefficient of .485, which although similar to that of the United States, leaves 37.8% of the population below the poverty line, due to lower aggregate income. The richest 10% of the population receives approximately 15 times the income of the poorest 40%.
As of 3 November 2014, the IMF reports official reserve assets to be $3.192B. Foreign currency reserves (in convertible foreign currencies) are $2.675B. Securities are $2.577B with total currency and deposits at $94.9M. Securities with other national central banks (BIS and IMF) are $81.10M. Securities with banks headquartered outside the reporting country $13.80M. SDRs are at $245.5M. Gold reserves (including gold deposits and, if appropriate, gold swapped) reported at $271.4M with volume in millions of fine Troy ounces at $200k. Other reserve assets are financial derivatives valued at $2.7M.
Having this hard currency buffer to work with, the Salvadoran Government undertook a monetary integration plan beginning 1 January 2001, by which the U.S. dollar became legal tender alongside the colón, and all formal accounting was undertaken in U.S. dollars. This way, the government has formally limited its possibility of implementing open market monetary policies to influence short term variables in the economy. Since 2004, the colón stopped circulating and is now never used in the country for any type of transaction; however some stores still have prices in both colons and U.S. dollars. In general, people were unhappy with the shift from the colón to the U.S. dollar, because wages are still the same but the price of everything increased. Some economists claim this rise in prices would have been caused by inflation regardless even had the shift not been made. Some economists also contend that now, according to Gresham's Law, a reversion to the colón would be disastrous to the economy.
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