To the relief of policymakers, exports have also risen. They are running at US$270m per month, up from US$260m in 2003. Higher coffee prices have helped, but, worryingly, maquila exports have dropped by about US$5m a month to US$152m a month.
Policymakers are concerned about the effect high oil prices will have on the economy. Inflation is already at 5.3% for the 12 months to August. In
calendar 2003, the inflation rate was 2.5%.
Remittances, the country's biggest source of foreign exchange, are holding up, despite the patchy economic recovery in the US. In August remittances hit US$225m, a new record. For the first eight months remittances were 17% ahead of the same period of 2003 at US$1.64bn. In 2003, they totalled US$2.1bn. The peak month for remittances is October, when they are
usually around a third more than the monthly average for the rest of the year.
The 2003/04 coffee crop was decent, and improving prices helped the industry to increase its export revenues. The coffee year runs from October to September: in the first 10 months of the current year the country
exported US$101m worth of coffee, up from US$94m in the same period of 2002/03. The average export price was US$70.2 per 100llb bag (quintal) compared with US$60 in the previous year.
The bottom line is that the country had a trade deficit of US$1.67bn in the first seven months of 2004. While exports were US$1.88bn, imports came to US$3.56bn.
President Tony Saca said that his top priority is to boost employment. The government has two main plans. One is to develop the tourism industry and the other is to build up the country as logistical hub. In the first half of the year, 610,000 tourists spent US$246m in the country. The tourism
ministry said that revenues were up by 4% while the number of visitors was up by 3%.
The idea of the logistical hub would build on the country's successful airline and airport-services industry and its free zones. The government recognises doing this will mean dismantling protection for the sugar and pharmaceuticals industries. Currently there are tariffs in both these industries which make importing confectionery and pharmaceuticals prohibitively expensive.
- Exports in the first seven month came to US$1.88bn. In the whole of 2003 they were US$3.14bn.
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