Weekly Report - 5 February 2009 (ISSN 1741-7422)

EL SALVADOR | Trade deficit. The trade deficit reached US$5.21bn in 2008, up just over 10% on the previous year, according to the central bank. Exports grew by 14% year-on-year to US$4.55bn but imports also grew by 12% to total US$9.75bn. Part of the reason was the 33% increase in the fuel import bill last year to US$1.87bn based on an average crude price of US$99 per barrel. This should decrease markedly in 2009. It will need to. The problem for El Salvador is that remittances from expatriates generally fill the yawning trade deficit but they are falling as this continues to grow. With the global economic slowdown setting in, this trend will continue in 2009. Remittances in 2008 totalled US$3.8bn - up 2.5% on 2007 - but they fell in the final quarter.

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