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El Salvador
El Salvador achieved independence from Spain in 1821 and from the
Central American Federation in 1839. A 12-year civil war, which cost
about 75,000 lives, was brought to a close in 1992 when the
government and leftist rebels signed a treaty that provided for
military and political reforms.
Capital City: San Salvador (-6 GMT)
Chief of State: President Elias Antonio SACA Gonzalez
Head of Govt.: President Elias Antonio SACA Gonzalez
Currency: Salvadoran colon
Main Cities: Santa Ana, San Miguel, Soyapango
Major Languages: Spanish
Calling Code: 503
Voltage: 110V
Stock Exchanges: Bolsa de Valores de El Salvador
Primary Religions: Roman Catholic
Main Airports
San Salvador (SAL) (El Salvador International)
U.S. Embassy
Final Blvd. Santa Elena, Antiguo Cuscatlán, La Libertad
tel: 011-503-278-4444
Statistics
- GDP: purchasing power parity:
- $31.24 billion (2005 est.)
- GDP - real growth rate:
- 2.8% (2005 est.)
- GDP - per capita: purchasing power parity:
- 4,700 (2005 est.)
- Inflation rate (consumer prices):
- 4.7% (2005 est.)
- Labor force:
- 2.81 million (2005 est.)
- Exports:
- $3.586 billion (2005 est.)
- Exports - partners:
- US 61%, Guatemala 12.1%, Honduras 7.4%, Nicaragua 4.2%
(2005)
- Imports:
- $6.678 billion (2005 est.)
- Imports - partners:
- US 43.4%, Guatemala 8.2%, Mexico 7.8% (2005)
- Population:
- 6,822,378 (July 2006 est.)
- Population growth rate:
- 1.72% (2006 est.)
- Population Below Poverty Line:
- 36.1% (2004 est.)
- Major Industries:
- food processing, beverages, petroleum, chemicals,
fertilizer, textiles, furniture, light metals
- Employing Workers: 70*
- Registering Property: 49*
- Enforcing Contracts: 116*
- Closing a Business: 79*
- *2006 World Bank rank out of 175 countries
- Starting a Business
The table below shows the number of steps and the amount of
time needed to start a business, on average
| Indicator |
El Salvador |
Region |
| Procedures (number) |
10 |
10.2 |
| Time (days) |
26 |
73.3 |
El Salvador Risk Assessment
Country Rating
Rating: B
Political and
economic uncertainties and an occasionally difficult business
environment can affect corporate payment behaviour. Corporate
default probability is appreciable.
Risk Assessment
GDP growth will suffer a downturn
mainly attributable to the economic slowdown in the United States,
upon which the country remains very dependant, notably as a market
for nearly 60 per cent of its exports. In that dollarised economy,
domestic demand will remain the growth engine, with increased public
spending in the run-up to general elections early 2009 supposed to
offset the slower growth of private consumption, attributable to the
deceleration of transfers from expatriates in the United States.
Although the construction sector will be less dynamic in this
context, agriculture, commerce, transport, and services will remain
relatively buoyant. Having suffered from Asian competition after the
Multifibre Agreement expired, the
maquiladoras
— assembly units in the textile sector — undertook restructuring
that has begun to pay off.
The tight fiscal policy pursued by the
government in liaison with the IMF has allowed it to reduce the
fiscal deficit and relatively high public debt, representing an
estimated 41 per cent of GDP in 2007. The trade deficit, meanwhile,
will continue to widen with imports spurred by strong domestic
demand, oil purchases and buying abroad associated with the
country's integration into DR/CAFTA, the free trade area agreed
between Central America and the United States. The volume of
expatriates' remittances and the development of tourism will only
make possible a slight reduction in the large current account
deficit and, with foreign direct investment only expected to cover
half the substantial external financing needs, borrowing at less
favourable conditions will be necessary to cover the balance. The
foreign debt burden should, however, decline somewhat and the
banking system has grown stronger particularly since the acquisition
in 2007 of the three major local banks by Bancolombiano, Citibank,
and HSBC.
President Antonio Saca has remained
relatively popular but, lacking a parliamentary majority, his
rightwing party, Arena, has had to enter into alliances. That
situation has not facilitated progress on reforms, particularly of
the pension and education systems, which would contribute to easing
the poverty afflicting one-third of the population and thereby to
easing the level of insecurity, linked particularly to the existence
of maras,
very violent youth gangs.
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