Macroeconomic Forecast El Salvador

BMI View: We forecast El Salvador's fiscal deficit as a percentage of GDP to come in at 2.1% in 2011 and 2.0% in 2012, which was revised down from 1.5% on the back of recent flooding. The government has reported an estimated US$840mn worth of damage to public property, such that even with the recent influx of grants and aid we expect to see significant additional expenditure needed to rebuild the country's damaged infrastructure. Simultaneously, revenue intake is also expected to suffer in coming months as much of the population remains displaced.

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