Weekly Report - 26 June 2008 (ISSN 1741-7422)

EL SALVADOR | Transport protests. Congress approved a bill this week doubling the monthly subsidy paid to bus companies to US$800 and for minibuses to US$400 in order to keep fares down. Bus companies put up fares by 40% to 35 cents at the start of June to pass on the increase in the cost of diesel. Protesters set fire to two buses and riot police had to break up a protest by students from the state Universidad de El Salvador. The archbishop of San Salvador, Fernando Sáenz Lacalle, had appealed to congress to approve the subsidy, which will benefit some 80% of the population who rely on public transport. Inflation reached 8.4% in the 12 months to May, the highest rate for 12 years, as a result of increasing fuel and food costs not irresponsible monetary policy. Indeed, El Salvador has the lowest inflation in Central America, where the average is 12.6%. On the plus side remittances continue to flood in, totalling US$1.60bn in the year to May, up 6.3% on the same period a year earlier.

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