El Salvador Today According to FUSADES

The Economic Situation Report at the end of the first quarter of 2011 states: Economic growth is still slow and fragile.

Tuesday, May 17, 2011

The global economic recovery continues, although there are still some weaknesses in the international financial condition. A 4.4% expansion is projected for 2011. However, this recovery is uneven across countries: while the developed economies are could reach 2.5% growth, in emerging and developing countries the expansion could be 6%.

This has been a boost in exports and remittances. The recovery in external demand is a favorable factor that is driving the performance of Salvadoran exports which grew by 28% in the first quarter of this year, such behavior is observed both in traditional and non traditional exports. These are determined largely by the rise in international prices for coffee and sugar.
The global economic expansion has resulted in a positive effect on employment, particularly in the U.S., which has led, in turn, to an increase in remittances to El Salvador up 4.5% so far this year.

It has however also increased the prices of imported commodities. The recovery of demand, together with restrictions on the supply of certain foods and commodities, has also pushed up prices of commodities imported from El Salvador, such as wheat and oil, which have risen by 74% and 38%, respectively, thereby adversely affecting the consumption capacity of Salvadoran households, especially the poorest.



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