When we talk about the economy of El Salvador we refer to the process of production, exchange, distribution and consumption of goods and services in the country. This aspect is of great importance, since through it we can also measure the economic growth that El Salvador and its inhabitants are having.

 

History

Throughout history, El Salvador had various sources of production that have made the economy grow; these are some of the most important.

• Cocoa and Balsam (1492-1800): From ancient times the Indians who inhabited our country were engaged in various crops and cocoa was one of them. The cocoa was considered as something of great value, it could be turned into chocolate, a drink that only the important personages of that time could consume; In addition cocoa seeds were used as coins, meaning that they had an economic value. Cocoa found a market. With the arrival of the Spaniards, the export of this product to Europe grew greatly. When that export fell, that of Balsam grew, an aromatic substance obtained from the tree of the same name that was used for medicinal, aromatic and religious purposes.
• Cotton (1855-1870): Cotton exports were one of the products that sustained the economy of the country for a short period of time due to the demand that existed of this product in the looms. Production fell apart because of the government's limited economic capacity to increase it and the pests that affected this crop.
• Coffee (1831-1900): The next stage was marked by coffee exports. This product was cultivated from time immemorial time in El Salvador but not in large quantities. The demand of the same allowed a fast growth that over time was growing.
• Agroexports (1900-2000): During this century coffee exports were maintained, although to a lesser extent. It was also time to explore new ways of exporting that would contribute to boosting the economy, especially in agriculture, where basic grains, livestock and poultry exports grew. In the 1970s there was also growth in the textile sector, through the free trade zones.

The employment that is generated in the agricultural activity with the passage of time has perceived a decrease due to the productive structure that has contributed to the displacement of the employed population in the agricultural sector to other productive sectors such as industry, services and commerce.

 

Current economy

During and after the civil war in El Salvador (1980-1992) there was a phenomenon of migration of Salvadorans to the United States, which helped these people to send to their families in the country economic aid that is known As remittances.

Currently, the Salvadoran economy is mainly based on the following:

• 70% Family remittances.
• 12% maquiladora activity.
• 6% Traditional agroexports.

 

Sectors

Within the economy of El Salvador there are several sectors that contribute to their income.

• Agricultural sector: It is represented by agricultural activities that still continue to be the main contribution to the economy. Includes production for export and for consumption, among which we can mention: Crops of maize, beans, rice, wheat, among others. Also included are livestock and fishing.
• Industrial sector: It includes the production of various articles or products for the purpose of exporting them or for national consumption. Raw material factories or finished products are included here.
• Commercial section: It is an important part of the national economy, since it allows the occupation of many people who are active in companies and businesses dedicated to the sale or purchase-sale of products or services.
• Credit Sector: It is represented by the financial institutions of the country or banks that are responsible for boosting the economy by providing loans to micro, small and large companies.
• Foreign sector: They are Salvadorans who are in other countries, mainly in the United States, and who provide financial help to their relatives in the country.

 

Infrastructure

El Salvador has an infrastructure that allows for faster exports. Over the years they have grown and among them are accounted for:

• 12,000 kilometers of roads; 1700 km of them asphalted.
• 5 Ports (Acajutla, El Triunfo, La Libertad, Cutuco, La Unión).
• 2 international airports (Comalapa and Ilopango).

 

Indicators

These are some important indicators or aspects that allow us to know how the Salvadoran economy is:

• GDP (Gross Domestic Product): 32,261 million (2014).
• GDP per capita: 4,753 (What a person earns on average per year 2013).
• Inflation: 1.7% (2014).
• Poverty: 26.7% (2000).
• Labor force: 3,074,000 people (2010).
• Unemployment: 7.2% (2009).
• Exports: 8,2860 million (2010).
• Imports: 7,967 million (2010).
• External debt (public and private): 10.89 billion (2010).
• Public revenue: 3,798 million (2010).
• Public expenditure: 4,803 million (2010).