Macroeconomic Forecast El Salvador

El Salvadoran trade continued to feel the pain of global recessionary forces in May, with exports and imports down by a respective 20.4% and 35.0% y-o-y. However, as we have seen in other countries across the region, with import contraction outpacing that of exports, there has been a net improvement in the trade account position. The merchandise trade deficit came in at US$1.3bn in the first five months of the year, a significant narrowing from the US$2.2bn shortfall observed in 2008. Thus, the data chimes with our view that the full-year shortfall will narrow to US$4.3bn, from US$5.2bn last year.

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