El Salvador
- Author: Economic Commission for Latin America and the Caribbean
- Main Title: Economic Survey of Latin America and the Caribbean 2001-2002 , pp 163-170
- Publication Date: October 2002
- DOI: https://doi.org/10.18356/f3fc74a2-en
- Language: English
In 2001 the Salvadoran economy continued to slow down for the fourth year in a row, with GDP growth reaching only 1.8%; as a result, there was almost no growth in per capita output. The adverse situation of the world economy was reflected in a decline in maquila exports and a drastic fall in international coffee prices, which eroded the terms of trade. The country was hit at the beginning of the year by two earthquakes, and later by a serious drought. A steady stream of family remittances, however, equivalent to 14% of GDP, and an increase in public investment for rebuilding damaged areas staved off a more serious contraction in domestic demand, although public finances became more fragile. Meanwhile, inflation remained under control and exhibited a downward tendency, encouraged by the entry into force of the Monetary Integration Act, which fixed the exchange rate and established the United States dollar as the unit of account.
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