Population - 6,420,740
In 2017, El Salvador GDP was an estimated $28.0 billion (current market exchange rates); real GDP was up by an estimated 2.4%; and the population was 6 million.
U.S. goods and services trade with El Salvador totaled an estimated $7.3 billion in 2016 (latest data available). Exports were $4.1 billion; imports were $3.2 billion. The U.S. goods and services trade surplus with El Salvador was $831 million in 2016.
El Salvador's economy is predominantly services-based. Agriculture accounts for about 10% of GDP and employs 21% of the population. Manufacturing and industry accounts for 25% of GDP and employs 20% of the population. The service sector accounts for almost 65% of the GDP and employs 58% of the population.
The United States is El Salvador’s main trading partner.
U.S. companies exporting to El Salvador benefit from the CAFTA-DR with zero percent duties on U.S. consumer and industrial goods. El Salvador has a dollarized economy, which eliminates foreign exchange risk and lowers transaction and financial costs. Moreover, the proximity to the United States gives El Salvador a strategic location and elevates its position as a regional hub for Central America. Additionally, El Salvador is a highly receptive market for U.S. products and services.
The top export categories (2-digit HS) in 2017 were: mineral fuels ($662 million), special other (medicinal pharmaceutical products) ($248 million), machinery ($221 million), electrical machinery ($200 million), and cereals (corn) ($165 million)
Legal & Political
Politically, the country remains divided and held municipal and legislative elections in 2018 and will hold Presidential elections in 2019.
The Government of El Salvador (GOES) continues to struggle to attract foreign direct investment (FDI) in comparison to the rest of Central America. The most recent data from the Salvadoran Central Reserve Bank reported FDI inflows at $428.75 million in 2015, significantly less compared to the $1 billion average to other countries in the region. Leading causes contributing to the lack of FDI include the deteriorating security situation and inconsistency in enforcing commercial law.
Corruption remains a problem in El Salvador, which ranked 95 out of 168 in the 2016 Transparency International’s Corruption Perceptions Index, which scores countries on their perceived levels of corruption. Soliciting, offering, or accepting a bribe are considered criminal acts and U.S. companies doing business in El Salvador are subject to the United States Foreign Corrupt Practices Act.
Treaties and Agreements
El Salvator and United States operate under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR). The CAFTA-DR includes important disciplines relating to: customs administration and trade facilitation, technical barriers to trade, government procurement, investment, telecommunications, electronic commerce, intellectual property rights, transparency and labor and environmental protection.