El Salvador had an estimated population of 6,822,378 in July 2008. Its GDP growth rate increased from 2.80% in 2006 to 4.70% in 2008. Traditionally El Salvador possessed an agricultural economy. At present, services sector and industrial sector accounts for a higher percentage of national GDP.
Among agricultural products, coffee accounts for two-thirds of El Salvador’s exports. It provides employment to around one-third of El Salvador's labor force. Industrial sector of this country caters mostly to its domestic market and the Central American markets. With availability of foreign financing at concessional rates El Salvador enjoys a low level of indebtedness.
El Salvador economy overview
Resuscitation of civil war hit El Salvador economy started in a big way from early 1990s. El Salvador adopted US dollar as official currency from 2001. El Salvador's prime subsistence crop is corn. Other agricultural produce of importance includes rice, sorghum, beans and oilseeds. Major cash crops include coffee and sugar. Leading manufacturing industries of El Salvador are petroleum, light metals, chemicals, furniture, fertilizer, food processing, textiles and beverage processing. El Salvador’s leading imports are electricity, raw materials, petroleum, consumer goods, food, capital goods and fuel. United States is El Salvador's biggest trading partner. El Salvador is well connected with ports of La Libertad , La Unión and Acajutla and also inland cities of Santa Ana and San Miguel via Inter-American H
El Salvador's economy 2008
In 2008, spiraling global food and oil prices have generated upward movement of consumer price index in El Salvador. As per El Salvador’s official statistical agency it’s CPI increased by 0.8% during April 2008. Inflation stood at 6.8% in April 2008. Food prices recorded a considerable hike of around 11.7% annually. Transport prices rose due to hike in oil prices. They recorded a 9.1% rise year on year. Hotel and restaurant prices rose by 12.6%. Food prices are likely to rise further in face of low rainfall in this season. Government is also facing demand for hike in public transport fares, which will in turn push up cost base of the economy. Analysts predict that higher industrial prices will push up consumer prices further in 2008. Inflation is estimated to hover around 7.3% at 2008-year end. Stabilization of oil prices is deemed necessary for containment of inflation.