Friday, 07 July 2023 05:09

El Salvador's GDP is in recessionary growth of 0.8%: Economist

Written by Evelyn Alas

In a morning interview, economics expert, Cesar Villalona, explained that in a report of the Banco Central de Reserva of the first 3 months of 2023 reflects that the economy has a recessive growth of 0.8%, El Salvador's economic growth depends on private investment.

He details that this growth of 0.8% is a stagnation, in 2022 the economy grew 2.6%, the economy depends on factors such as investments or fall in the price of exports, the industry is stagnant, while the agricultural sector and trade with negative rate.

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El Salvador sells 30% of its products abroad, exports have fallen to -7.2%, the share of Gross Domestic Product (GDP) has fallen and in quantity -0.5%.

He added that the official data from the Ministerio de Hacienda up to may 2024 detailed that the tax collection has fallen -0.5% compared to the budget the fall is higher than 4.1% with respect to what they expected.

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On private investment, credit has grown at 2.6% through may, it is stagnant which means that much of that credit is for financing not investment.

He further stated that raw material imports have fallen by -20.8%, if less raw material is coming in, investment cannot go up.

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The expert pointed out that there are 6% of homes in El Salvador without electricity, while energy prices depend on oil and clarified that prices are not fixed by the Central Government.

In 2020 the economy fell -10%, companies worked between 8 and 9 months, this year experts say that the economy is already normal, the stagnation of production is due to a price increase, inflation is at 4.8% and food at 8.3%.

From december to march of this year we have 3,050 formal jobs in the country in the private sector, while at the beginning of June 1,000 women were fired from maquilas, the owners left the country, those who were fired were not paid.


Translated by: A.M