SECTION III - ECONOMIC TRENDS AND OUTLOOK - Highlights The Salvadoran economy continues to reap the benefits of sound economic programs, a commitment to a free economy and careful fiscal management. The service and construction sectors led El Salvador's economy to a real growth rate of five percent of GDP in 1993. Inflation was 12 percent in 1993, down from 20 percent the year before. The economic outlook for 1994 is for growth of 5.5 percent with inflation dropping to 10 percent. In 1993, El Salvador's total exports were 731.7 million dollars while imports were 1.9 billion dollars. This billion dollar plus trade deficit was offset by family remittances of almost 800 million dollars plus generous amounts of bilateral aid as well as loans from multilateral lending organizations. A breakdown of Salvador's imports reveals that 25 percent were machinery and equipment destined to upgrade the nation's productive sectors. At the end of 1993 the nation had net international reserves of 667 million dollars, equal to roughly four months of imports. This compares to 506.6 million dollars at the end of 1992. The exchange rate is about 8.7 colones per dollar. The nation has a conservative debt posture, and most of the roughly 1.8 billion dollars of debt is to multilateral lending institutions. Visitors to El Salvador are often surprised by the amount of new construction in and around San Salvador as well as in other parts of the country. Much of this construction is housing for the nation's burgeoning middle class. Industries tied to construction, such as non-metallic minerals, are operating at very high rates of capacity. Urban unemployment in 1993 was about 8.1 percent while the minimum wage in urban areas was 935 colones, roughly 107 dollars per month. According to a study done in mid-1993, even the least skilled workers in urban areas generally earn twenty percent more than the minimum wage. In 1993, based on statistics from the Salvadoran Social Security system, the formal sector created 36,800 new jobs. After reviewing the number of new businesses starting up plus the plans of business leaders to expand their operations, the Embassy believes the formal sector will create even more jobs in 1994. - Current Economic Situation and Trends A. Economic Growth From Free Market Initiatives In 1994 the target for the Salvadoran economy is real growth of 5.5 percent of GDP, compared to 5 percent in 1993 and 5.1 percent in 1992. These impressive growth statistics are directly related to the reform program launched by President Cristiani in July, 1989. The President and his advisors, mostly laissez-faire enthusiasts, applied free market principles to El Salvador's war- ravaged economy. Important elements of the economic program that were quickly implemented in 1989-1990 include: 1. Elimination of price controls on 240 consumer products. 2. The break-up of government and government-sponsored monopolies in the export of coffee and sugar. 3. Reduction of import tariff duties from a range of 0-240 percent to 5-35 percent. 4. Elimination of non-tariff barriers such as quotas, import prohibitions, import licenses, and prior deposit requirements. 5. Adoption of a free market exchange rate system. 6. Legalization of foreign exchange houses. 7. Maintenance of positive real interest rates. 8. Reduction of the fiscal deficit by cutting real expenditure levels and raising key public utility rates. 9. Initiation of a program to overhaul the tax system based on the supply-side notion of lower tax rates/broader tax base. 10. Implementation of disciplined monetary policies. 11. Plans to privatize the banking system. During 1991 and 1992 the Government of El Salvador (GOES) consolidated the economic program and adopted follow-up measures. Among the more important actions taken in 1991 were: -- Established interest rate bands allowing banks greater flexibility to set loan and deposit rates. -- Closed the once powerful state-run grain board -- Initiated a share offering for the sale of two banks to the private sector. -- Passed tax reform legislation that lowered the top marginal rates on corporate and personal income taxes. The GOES took the following important actions in 1992 that increased GOES revenues and improved the nation's economy: -- Introduced the ten percent value added tax (IVA) that replaced the decades-old stamp tax. -- Raised utility rates. -- Raised bus fares. -- Sold the Hotel Presidente to private investors. -- Deregulated interest rates In 1993, the GOES moved forward with the sale of banks and the savings and loans to private investors. As of August 1994, all but one commercial bank and all savings and loan associations are in private hands. The vast majority of Salvadoran tariffs are in the 5-20 percent range. There are a few exceptions at 25 and 30 percent. The five percent growth in real terms in 1993 was spread throughout the economy, although the service and construction sectors were leaders. A sector by sector breakdown is as follows: Table 1 GDP Growth by Sector in 1993 Agriculture 0.5 Mining 12.5 Manufacturing 7.6 Construction 10.3 Electricity and Water 14.8 Transport and Communications 8.2 Commerce 7.0 Finance 8.8 Housing 3.0 Government 0.9 Services 5.5 Overall Growth for 1993 5.5 Source: Central Bank of El Salvador B. Agriculture In 1993, this sector had a growth of approximately 2.8 percent, down from 7.8 percent in 1992. This drop was due primarily to a contraction of 48,000 manzanas (83,180 acres) in the area planted in basic grains. The outlook for 1994 is modest growth in this sector. In 1994, coffee production, which accounts for about a third of El Salvador's agricultural output, is forecast to drop. Reasons for this smaller crop include: conversion of prime coffee land into sub-divisions; farmers have cut back on fertilizers, maintenance, and new planting after years of low coffee prices; and a small, but growing scarcity of workers for the coffee industry during peak periods. In early 1994, the Central Bank announced a refinancing program to roll over debt of coffee farmers. In 1993, El Salvador joined with other nations in a coffee retention scheme that, according to advocates, has helped raise coffee prices. In 1993, coffee exports totaled 226 million dollars. Sugar is El Salvador's second most important agricultural product after coffee and a bright spot in the agricultural sector. El Salvador's sugar harvest in the 1993/94 season should reach about 7.7 million qunitals, which would be about 9 percent more than the previous season. The harvest at almost all of the sugar refineries began on December 15 and is proceeding on schedule. El Salvador's sugar quota for the United States has declined, forcing exporters to increase sales to other markets. Sugar exports in 1993 were 31 million dollars. In 1992, the sugar refineries revised their buying practices to take into account quality as well as weight of the sugar cane, a move that has increased efficiency among sugar cane producers. The privately owned Izalco sugar refinery is in the midst of a twenty million dollar modernization program. In 1994 the GOES plans to privatize some of the government owned sugar refineries. Sugar production is somewhat like a double edged sword. It is produced at a cost well below the U.S. quota price, more or less equal to the domestic sugar price, but slightly above the present world price. Therefore, as production increases, more sales are made to the world market and, at the present world price, there are economic losses from this increased production. Cotton production continues to decline in El Salvador. In 1994 cotton farmers will plant less that 5,000 manzanas or 8,650 acres of this crop compared to 120,000 manzanas or 207,600 acres in the late 1970s. Seventy percent of the traditional cotton production area is located in the Eastern region of the country, where the effects of the conflict were the most severe. In 1994, El Salvador's textile industry will need more than 80,000 bales of cotton, while the domestic production will probably only reach 5,000 bales. (Note: Each bale of cotton weighs 480 pounds.) Production of Salvadoran corn and beans declined in the 1993/94 season compared to the previous year. Corn production dropped a steep 10.6 percent to one million quintals as both the area planted and the yields per acre declined. One discouraging point is that the use of hybrid corn seeds has steadily declined since the 1987/88 harvest. Many corn producers, with modest financial resources, are unable to access improved technologies and techniques to improve the output of their lands. In 1993, the price of beans in El Salvador climbed from about 2.5 colones per pound in February to over 7 colones a pound in August before declining when the harvest began at the end of November. The 1993/94 bean harvest is estimated at 1,350,000 quintals, a slight drop from the 1.4 million quintals of the previous season. The production decline is attributed to less area planted (6,900 manzanas) and lower yields from the excessive rainfalls in September and early October 1993. Recognizing the need to diversify the agricultural economy, development planners have focused on non-traditional agricultural exports. FUSADES, the private enterprise development organization, is working with private investors to produce different non-traditional crops. Recent examples of non- traditional exports include melons to Holland, jalapeno peppers and marigold flowers to the United States, and organic coffee to various markets. One cooperative was going to export onions, however, a pizza chain purchased the cooperative's entire output for its rapidly growing network of pizza outlets. During the 1994 Presidential campaign, one candidate raised the issue of idle lands. According to the Minister of Agriculture there are idle lands, but incorporating these lands is not an easy task. Some areas suffer from serious erosion while other areas are slowly recovering from excessive pesticide use, including DDT. He sees the reincorporation of these lands to productive status as a slow process. An agricultural cooperative won an ecology award in 1993 for its restoration of agricultural lands that had been affected by severe erosion and another won an award for producing and marketing organic coffee. C. Manufacturing In 1993, the manufacturing sector had real growth of 7.6 percent, and the forecast for 1994 is real growth of 7.1 percent. Key factors behind this growth are expanded sales to the Central American market and increased factory utilization. The impressive investments by firms in new equipment in 1993 will help maintain the impressive growth rate in the manufacturing sector. In 1993, this sector accounted for 18.8 percent of El Salvador's GDP, produced 50.8 percent of the exports, and employed about 15 percent of the workforce. Most of the manufacturing sector is located in and around the capital city of San Salvador. The sector includes firms whose production goes to the domestic market and neighboring Central American nations as well as companies, often located in export processing zones, whose markets are the United States and other industrialized nations. In the 1970s El Salvador was the most industrialized nation in Central America, although 12 years of civil war eroded that position. This sector has greatly changed since 1989, when the Cristiani Administration dismantled the protectionist trade policies that had allowed inefficient, import substitution industries to prosper. El Salvador's industrial sector now faces strong import competition. A key phrase is industrial reconversion, which includes installing new equipment and modernizing the ways of doing business. The improved productivity has come naturally; many believe the nation's most important resource is its abundant and energetic work force. The Salvadoran work ethic is often cited by foreign investors as the primary reason they chose to locate manufacturing facilities in this nation. Apparel assembly is the fastest growing segment of the manufacturing sector. Firms located in export processing zones are expanding their operations. The Embassy estimates that around 50,000 workers are now employed in textile firms, up from 32,500 at the beginning of 1992. While all of the space is now rented in the San Bartolo Export Processing Zone and the El Progreso Zone has limited space available, the San Marcos and El Pedregal zones are expanding. The San Marcos zone, located near San Salvador on the road to the airport, has 38,500 square meters and is building another 7,000 square meters. The El Pedregal zone, located near the airport, has a total of 50,720 square meters, 45,320 square meters just completed, of which 24,600 square meters is available. Not all maquila companies are in export processing zones as Salvadoran law allows maquila operations in other areas. For instance, one maquila firm is located in a converted warehouse facility about a mile from the US Embassy. The factory utilization index for the last quarter of 1993 was 73 percent. Standout sectors were the paper and printing industry, which operated at 85 percent of capacity, while non-metallic minerals, whose output goes to the construction industry, registered a 79 percent utilization level. These two sectors were also leaders in attracting new investment in 1993. D. Commerce and Foreign Trade Commercial Activity has been a dynamic growth sector in the past decade in El Salvador. It increased its share of GDP (measured in current prices) from 22.9 percent in 1980 to 36 percent in 1993. The pace of commerce in El Salvador is linked to the crop and holiday cycles. Commerce peaks during the November- March harvest season (which includes the Christmas retail period) and tends to decline throughout the rest of the year. In 1993 imports were 1.9 billion dollars, a 12.6 percent growth compared to 1992. The following table provides a breakdown of El Salvador's imports by category and reveals an economy upgrading its productive capabilities: Table 2. Imports in 1993 (In thousands of dollars) Category 1992 1993 Percentage Variation A. Consumer Goods 489,071 522,005 6.7 percent -- durables 71,242 81,226 14.0 percent -- non durables 417,829 440,779 5.5 percent B. Intermediate Goods 778,389 825,362 6.0 percent -- manufacturing sector 606,387 630,087 3.9 percent (of which petroleum was) 128,152 122,978 - 4.0 percent -- agricultural 70,848 70,204 - 0.9 percent -- construction 90,579 110,971 22.5 percent -- other 10,581 14,100 33.3 percent C. Capital Goods 431,038 564,863 31.0 percent -- Manufacturing ind. 121,394 170,514 45.5 percent -- transportation 205,537 257,365 25.2 percent -- agriculture 11,822 10,948 - 7.4 percent -- construction 15,357 29,658 93.1 percent -- other 76,928 98,378 25.3 percent In 1993, according to the Central Bank, El Salvador's exports were 731.7 million dollars, an increase of 134.1 million dollars compared to 1992. Much of the increase was in coffee exports and non-traditional exports destined to the Central American market. The composition of the exports is as follows: Table 3. Exports of El Salvador in 1992 and 1993 Category 1992 1993 Percentage (in Millions of Dollars) Variation Coffee 151.2 226.3 30.5 percent Cotton 1.5 0.2 86.7 percent Sugar 44.7 31.1 31.3 percent Shrimp 19.8 25.8 30.3 percent Non-trad. Central America 257.3 309.2 20.1 percent Non-trad. to other nations 123.0 139.1 13.1 percent Totals 597.5 731.7 22.4 percent Note: These figures do not include the value added from drawback operations. The big story in El Salvador's exports is the resurgence of non-traditional exports to Central America. This was a strong area in the 1970s, but by 1986, after years of political turmoil had taken their toll, non-traditional exports to Central America had dropped to under 100 million dollars for the year. Since 1986 these exports have been rebounding, and in 1993 reached over 300 million dollars. Salvadoran businesspeople continue to expand their export efforts to Central American nations. The GOES has been a leader in pushing for increased regional integration in its trade negotations. The Embassy predicts further growth in non-traditional exports to Central America in 1994. Subtracting export income from imports, El Salvador has a billion dollar plus merchandise trade deficit. This deficit is covered by family remittances, estimated at almost 800 million dollars in 1993, plus generous donations from foreign governments and loans from multilateral international organizations. Two additional important sources of foreign exchange in El Salvador are tourism and ANTEL, the telephone company. Much of El Salvador's tourism is termed "ethnic tourism," the visits of Salvadorans living overseas to El Salvador to see family and friends. There is also an increasing number of business visitors to El Salvador. In addition, a small but growing number of visitors are drawn to this nation by special events, such as the Central American games or a surfing championship, or by particular sites, such as the Museum of the Revolution in Perquin. The economic section estimates tourism brings in about 50 million dollars a year. In 1993, ANTEL, Salvador's parastatal telecommunications, had net foreign exchange earnings of about 25 million dollars. ANTEL is upgrading its switching facilities, so this figure should rise in 1994 as ANTEL's ability to handle international calls increases. El Salvador is a beneficiary of the Caribbean Basin Economic Recovery Act, better known as the Caribbean Basin Initiative (CBI). This program currently allows, with the exception of certain products, duty-free imports of Salvadoran products into the US. In addition, the US government recently proposed new legislation to the US Congress that would enhance the CBI program. The Interim Trade Program (ITP), would grant further trade concessions, primarily in the textiles area. In return for NAFTA-like treatment for textiles and other items to the Caribbean Basin countires on a bilateral trade basis to make commitments mainly in the following areas: bilateral investment treaties, intellectual property rights, workers' rights, and the environment. In August 1994, the Interim Trade Program bill was still in the House of Representatives and Senate. E. Construction In 1993, the construction sector had turned in a stellar performance with a 9.7 percent growth rate. This impressive figure might be revised upward as new information becomes available. The outlook is for another great year in 1994. Many visitors to El Salvador are astounded at the amount of construction around San Salvador. Construction of new commercial areas, gasoline stations, fast food establishments and upgrades of existing facilities is taking place throughout the city. Construction of housing, especially for El Salvador's burgeoning middle class, is strong. Some housing developers are booked solid for the next 12-15 months. A common sight on weekends is to see a family inspecting the construction of their future home in one of the many housing projects that surround San Salvador. Cement consumption jumped 14.1 percent in 1993 compared to 1992, another indication of construction sector growth. Public sector spending also helped the construction sector in 1993. The GOES refurbished sports facilities for the Central American Games held in San Salvador in January 1994. Another positive point was the construction of a badly needed two level bypass on Autopista Sur in just two months. F. Finance A cornerstone of El Salvador's economic program has been implementation of orthodox monetary policy. Comparing 1993 to 1992, M1 (currency plus demand deposits) grew by 12.5 percent while M2 (M1 plus quasi money) grew by 28.3 percent. The principal sources of money expansion continue to be the inflow of foreign exchange through family remittances, donations, loans and capital repatriation plus increased loans to the private sector. One important note is that the public sector needed little financing in 1993 and did not represent pressures to expand the monetary base. Since 1990 El Salvador has had a free market exchange rate and legalized non- bank foreign exchange houses. Buoyed by family remittances of almost 800 million dollars in 1993, and generous amounts of bilateral aid, the colon trades freely at a rate of about 8.7 colones to one dollar. In 1992 and 1993 the GOES sold five banks: Banco Cuscatlan, Banco de Comercio, Banco Agricola Comercial, Banco de Desarrollo, and Banco Salvadoreno. In 1994, the GOES sold the remaining savings and loan associations and is in the process of selling the last state-owned commercial bank, Banco Hipotecario. An important factor in present and future economic growth is this more dynamic banking sector as compared to the situation when the banks were held by the government. Looking at government income, in 1993 tax revenues were 6,681 million colones (768 million dollars), a 22.3 percent increase compared to 1992. The majority of GOES income comes from three taxes: the value added tax or VAT, income taxes, and customs duties. Government expenditures in 1993 were 8,681 million colones (997 million dollars), an increase of 7.4 percent compared to 1992. The deficit was 1,980 million colones (227million dollars), smaller by 622 million colones compared to the 1992 deficit. External resources, including loans and donations, covered most of the deficit. The GOES and IMF have signed a new stand-by agreement that goes until the end of May 1994, the term of office of the Cristiani Government. In addition the GOES and the IMF have established "illustrative" targets for the new government. These targets will serve as a starting point for negotiations with the new government. The Inter-American Development Bank is disbursing about 225 million dollars of loans over a three to four year period to increase electricity production and provide support to private sector investment. El Salvador has a rapidly growing stock exchange. The vast majority of the issues traded are government and parastatal debt instruments, although some private companies are now taking advantage of the exchange to list equity and debt instruments. G. Trade and Investment Barriers As it now stands, El Salvador has relatively less bureaucratic impediments to trade and investment than many countries in the region (for example, unrestricted remittance of net profits for investors in industrial activities, a fixed tax rate for resident corporations, duty free importation of raw materials/intermediate products for free trade zone investors). El Salvador is also a member of GATT, ICSID, and the Multi-lateral Investment Guarantee Agnecy (MIGA), and is party to an investment guarantee treaty with the US since 1960. Eximbank and OPIC programs are available. This works in favor of investors. Investment legalizaiton procedures are lengthy (somethimes months). The government of El Salvador is currently working on a "one-stop shop" investment office for foreign investors in order to streamline the procedure. Independent of the registration process, foreign investors must also fulfill prerequisites with the superintendency of companies (e.g. proof of legal incorporation of parent firm's domicile and proof of sufficient assets to meet branch establishment and operating costs). Informal "facilitative" payments are often requested by customs and other officials to expedite routine tasks. Customs offices are understaffed and workd schedules are often not respected by officers. Information regarding required documents and signatures is lacking and often inconsistent. Customs clearance is slow whether investors have correct information or not. As many as eight rubber stamps may be required for one document and valuable time is lost in correcting deficient applications. H. Labor and Wages The largest share (34 percent) of El Salvador's labor force of approximately 1.5 million workers is in the agricultural sector. This is followed by services (21 percent), commerce (18 percent) and manufacturing (15 percent). The government raised the minimum wage in early 1993. The minimum wage in the industrial and commercial sectors is 935 colones (roughly 107 dollars) a month. A study done in mid-1993 found that urban employees with minimal skills generally earned at least 20 percent more than the minimum wage. In agriculture the minimum wage is 17 colones per day ($1.75) plus another three colones per day for food. Coffee plantation owners reported they often paid above the minimum wage to attract sufficient workers during the harvest. In March, 1994, ANEP, the umbrella organization whose membership includes almost all private sector organizations in El Salvador, called for increasing the minimum wage. Urban unemployment in 1993 was 8.1 percent. Visible underemployment, depending on the study, would add 3 to 7 percent to the unemployment figure. However, it should be pointed out that some contractors in the construction business are encountering problems finding sufficient skilled workers for the amount of construction now underway in El Salvador. According to social security enrollment statistics, the formal sector created 36,800 new jobs in 1993. Based on the number of new businesses starting operations and the plans of business leaders to increase their operations, the Embassy believes the formal sector will create more jobs in 1994 than in 1993. I. Inflation In 1993 inflation was 12.1 percent, a drop from 19.9 percent in 1992. The goal for 1994 is inflation in the 8-10 percent range. The Salvadoran consumer price index concentrates on four areas: food, clothing, housing, and miscellaneous. During 1993, price increases of beans, tomatoes, onions, and potatoes were important factors in the food component of the index. For instance, the price of red beans was at about 2.5 colones per pound in February 1993 and reached 7 colones per pound in August 1993. Once the second and largest bean harvest started to reach market in late November, the price of beans began to fall. Colon interest rates for borrowers start at about 19 percent, a high figure considering the inflation outlook. Depositors of fixed deposits for five-six month periods earn 14 percent, although lower rates are paid for shorter time periods. J. Foreign Assistance Foreign assistance plays an important role in the Salvadoran economy, helping to finance the balance of payments gap and providing funds to the capital budget for public sector infrastructure-development projects. In 1993, US Government (USG) assistance to El Salvador was approximately 228 million dollars, including 30 million dollars of PL-480, but aid levels are rapidly declining. PL-480 is a a program used to expand international trade to those countries that are determined to improve their own agricultural production and use the abundant agricultural productivity of the US to combat hunger and malnutrition. In March 1993, the international community, at a meeting in Paris, pledged 800 million dollars in loans and donations for reconstruction in El Salvador. This includes 225 million dollars in loans of the Inter-Ameican Development Bank for electricity generation and private sector investment. K. Major Local and Third Country Competitors Major competitors for US goods include: - Central America - Japan - Brazil - Germany L. Economic Outlook El Salvador appears headed for real economic growth of about 5.8 percent in 1994. The key event was the peaceful transition to a new government in June 1994, as a result of the March 1994 elections which included the former rebels as a legal political party for the first time. The governing right-of-center party has pledged to implement the Salvadoran Foundation for Economic and Social Development (FUSADES -- a private-sector development organization) study on steps to improve economic growth in the next five years. In February 1994 there was an important economic seminar held in San Salvador that discussed various options for the future government. The speakers represented a variety of political viewpoints and agreed upon the need for increased government spending in education and health. Important businesspeople agree that the low education levels of many workers, often just through the third and fourth grade, must be improved. - Implications for the U.S. Generally about one-third of all Salvadoran imports come from the United States. The Salvadoran market is very receptive to U.S. products. Important U.S. exports to El Salvador include grain, animal and vegetable oil, processed agricultural products, chemicals, electrical machinery, and construction equipment. Excellent opportunities exist for power generation and distribution equipment, machine tools, telecommunications equipment, computers and software, and transport equipment, including used buses. One fast growing, but very fragmented sector, is automobile parts and accessories. In 1993, U.S. imports from El Salvador included coffee, sugar, shrimp, melons, and apparel produced in the export processing zones. A key factor in the Salvadoran market is the direct and indirect influence of the one million or more Salvadorans who live in the United States. Word of successful new products or new fashions in the United States is quickly passed to El Salvador. - Investment Climate For enterprising investors, aware of possible risks in a developing nation recovering from a civil conflict, El Salvador presents a promising investment opportunity. El Salvador invites foreign investment; its free market economic reforms have considerably enhanced prospective returns for foreign investors. The regulatory landscape is positive. Since the resolution of the CAESS (an electric utility) nationalization case in March 1993, there are no expropriation cases pending in El Salvador. Foreign investors in El Salvador are not required by law to operate through a joint venture. Similarly local management and control are not required by law, but in El Salvador's small and highly concentrated local economic environment, local participation is generally desirable for all but major companies with significant overseas experience. Many foreign maquila investments do not have local participation. Promising investment opportunities include apparel assembly, fruit and vegetable processing, fast food franchises, supermarkets, hardware/builder's supply, plus automobile parts and accessories. The Embassy estimates that in 1993 there were about 40 million dollars of new direct foreign investment in El Salvador. This investment includes equipment for maquila plants, gasoline stations, both new and upgrades, and the terminal expansion for one major oil company. Factors that favor El Salvador for foreign investment include the modern airport with many direct flights to the United States each day; a new intellectual property rights law that was enacted in 1993, reasonable industrial electricity costs of about eight cents per kilowatt hour, and a highway system that is being rehabilitated with the support of loans from the Central American Development Bank. In addition, the GOES is working on a national investment office to facilitate foreign investment. Increasing public debate has led to the possibility of future privatization of services now provided by the government owned telephone and electric companies, various port facilities, and the sugar mills now in government hands. (Please See Section VII for more details.) -- El Salvador: Key Economic Indicators 1992 1993 1994 POPULATION 5.05 5.17 5.28 GDP(MILLIONS CURRENT COLONS) 54853 66238 75803 REAL GDP IN 1962 PRICES 3576 3753 3959 REAL GDP GROWTH PERCENT 5.1 5.0 5.5 GDP MILLIONS OF DOLLARS 6492 7614 8423 GDP PER CAPITA 1285 1473 1594 CPU INDEX CHANGE IN PERCENT 20 12 10 GOVT REVENUE BEFORE GRANTS 5093 6681 8430 GOVT EXPENDITURES 8026 8681 10675 GOVT DEFICIT PERCENT GDP 4.7 3.5 3.0 EXTERNAL SECTOR (MILLIONS OF DOLLARS) EXPORTS 598 732 797 -- OF WHICH COFFEE 151 226 194 - SHRIMP 20 26 26 - SUGAR 45 31 38 IMPORTS 1700 1912 2067 CURRENT ACCOUNT BALANCE (WITH OFFICIAL TRANSFERS -152 - 72 -134 (WITHOUT OFFICIAL TRANSERS -378 -322 -354 EXTERNAL DEBT 2338 1985 2292 DEBT SERVICE RATIO 35.8 29.1 27.7 DEBT SERVICE 346 332 350 EXPORTS OF GOODS AND SERVICES 966 1143 1262 NET INTERNATIONAL RESERVES 554 704 804 PREVAILING EXCHANGE RATE 8.45 8.7 9.0 MONEY AND CREDIT MONEY SUPPLY(M1) 5389 6331 7245 QUASI-MONEY 9985 12671 14493 CREDIT TO PRIVATE SECTOR 11390 13285 15562 CREDIT TO PUBLIC SECTOR 4218 4270 3550 US-EL SALVADOR TRADE US EXPORTS TO EL SALVADOR 678 844 868 US IMPORTS FROM EL SALVADOR 200 219 280