Although in the first half of the year sales abroad reported a slight decrease of 0.4% over the same period in 2018, the business sector in El Salvador expectsexports to rebound in the remainder of the year.
Exports from El Salvador up to June of this year registered a total of $3,033.9 million, with a reduction of $13.6 million, compared to the same period in 2018, when the total amounted to $3,047.4 million, informed the Central Reserve Bank.
Because of higher dividend repatriation and lower reinvestment of earnings, Foreign Direct Investment flows reported during the first quarter of the year totaled $177 million, 55% less than in the same period in 2018.
Central Reserve Bank (BCR) figures detail that between January and March 2018, and the same period in 2019, the attraction of Foreign Direct Investment (FDI) was reduced by $224 million, falling from $401 million to $177 million.
During 2018, electricity purchases totaled $167 million, 58% more than in 2017, and its main supplier was Guatemala, representing close to 81% of total sales.
Data from the Central Reserve Bank (BCR) indicate that between 2017 and 2018, energy imports went from $105 million to $167 million, the latest being the highest amount reported in the last twenty years.
Driven by the financial commitments of the Central Government and those originated by pensions, the country's public debt increased 3% at the end of 2018, reaching $18.975 million.
Finance Ministry statistics detail that between 2017 and 2018 the public debt that includes credits contracted by the Central Government, its financial and non-financial public companies, as well as the Central Reserve Bank, increased $602 million, from $18.373 million to $18.975 million.
From January to November 2018, electricity was imported for $154 million, 60% more than in the same period in 2017.
According to figures from the Transactions Unit (UT), the administrator of the electricity market in El Salvador, in the first eleven months of last year, injected 1,668.7 gigawatt-hours (GWh) of energy from the external market.
Although exports of dairy products have grown in the last two years, producers say that local production and domestic consumption have stagnated.
The Central Reserve Bank recorded record figures in the export of dairy products during the past year, adding up to $30 million, and in the first five months of 2018 sales abroad already add up to $12 million.
In 2017 exports totaled $5,760 million, 6% more than in 2017, and sales of clothing and sugar were the ones that accounted for most of the increase.
Sales in the Central American region, including Panama, constituted the second largest destination for Salvadoran exports, amounting to $2.403 billion, also registering an increase of 6% compared to 2016.
The Central Bank is preparing a draft law establishing a legal framework for factoring services.
Up until now factoring in the country has been governed only by the provisions of the Commercial Code, which falls short when regulating this funding mechanism, which is widely used particularly by SMEs.
15 months after the law entered into force, it has been announced that in July this year the regulations for the operation of the funds will be ready.
In parallel with the regulations of the law, work is also being done on other standards related to the operation of investment funds, such as "... the conditions for calculating the price of individual securities and portfolio management," among other things.
The United States remains the main buyer, with 47%, of total exports, 97% of which are products from the manufacturing industry.
Foreign Trade Report 2015 by the Central Bank:
Exports closed with growth of 4%, the highest in the last four years (2012- 2014 grew by 0.2% on average), while imports closed with a rate of -0.9%. These results led to a contraction of the deficit of $309.7 million.
The Central Bank, in compliance with Article 8 of the law against usury, published on January 15, 2016 in two national newspapers and on its website, the legal maximum rates that will be in effect during the period February 1 to July 31, 2016.
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