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According to a report prepared by the Salvadoran Association of Industrialists (ASI), the textile and plastic sectors contributed almost US $ 3 billion in exports between January and November of last year.
The textile and clothing industry, as well as the plastic industry, are the main sectors of production of Salvadoran exports that shipped most frequently during 2021. This is, specifically, between the months of January and November of 2021, according to the data presented recently by the Salvadoran Association of Industrialists (ASI).
These data, which are part of the Fourth Quarterly Report on Economic and Regulatory Performance that is published by the organization, confirm that exports from the trade sector have been one of the most important pillars of the economic recovery that the country experienced in 2021.
According to projections from the Central Reserve Bank (BCR), economic growth last year was 10.3% compared to 2020 when the economy contracted by 7.9% due to the impact of the Covid-19 pandemic.
According to the ASI, the textile and clothing sector has contributed approximately US $2.5 billion in Salvadoran exports to the economy in the period analyzed in the report. This figure translates into an increase of approximately US $738.7 million compared to 2020. While the second sector that has contributed the most to export totals is plastics. Salvadoran exports of plastic products include items such as plastic footwear and furniture. Such products shipped overseas totaled approximately US $491.3 million in 2021. This figure represents more than $125 million in shipments in all of 2020.
According to the union, the industrial sector has contributed the most to Salvadoran exports during the process of economic recovery. Manufactured products represent up to 96.9% of the total volume of goods sold to other countries. The United States stands out as the main destination for this merchandise.
The other items that have seen growth in overseas sales are food, as well as paper, cardboard, and graphic art products. These items grew in export volume by approximately US $50.7 million (12.6%) and US $82.5 million (27.4%), respectively, compared to volumes sold in 2020.
However, although the aforementioned sectors are the ones that have contributed the most to the country’s export volume of goods, a sector that has shown the greatest proportional growth (almost 47%) is the metal fabrication industry. Between January and November 2021, this sector exported US $271.5 million, which translates to US $86.6 million more than in 2020.
According to ASI data, as of November 2021, the country had already exported the sum of about US $6.1 billion, of which approximately US $5.8 billion corresponds to the aforementioned industrial sector.
In addition, the same report maintains that “the accumulated value of total exports of goods, as of November 2021, showed a growth of 33.4%. This is equivalent to US $1.5 billion more than in 2020. Compared to the year 2019, total Salvadoran exports increased by US $606.1 million dollars. This is equivalent to 11.1%, thus exceeding pre-pandemic levels,” the report says.
On the other hand, within the sectors that contributed to the volume of exports, the sugar industry decreased in monetary terms. It sent US $8.4 million less abroad when compared to 2020. This figure translates into US $205.7 million for 2021.
The main destinations
In the list of the principal buyers of goods and services from El Salvador, the United States continues to lead. According to the ASI, Salvadoran exports to the US from January to November 2021 reached about US $2.4 billion.
This translates into an increase of approximately 36.6% compared to 2020 and confirms the fact that the North American country is El Salvador’s main trading partner. The United States consumes nearly a full 40% of total Salvadoran exports. Its Central American neighbor Honduras is El Salvador’s second foremost trading partner.
Other countries that are significant foreign sales destinations include Nicaragua with US $449.7 million; Costa Rica with US $258.1 million; Mexico with US $130.7 million; Panama with US $114 million; the Dominican Republic with US $101.2 million; South Korea with US $81.8 million; and Germany with US $48.2 million.
The status of imports
On the other side of the trade coin, the ASI report shows that the Salvadoran economy continues to show a large trade deficit in which imports far exceed the country’s total exports.
For example, as of November 2021, the country had already imported the sum of US $13.8 billion. This signifies that the country bought US $7.7 billion more than what was sold in external markets. This amount represents an increase of up to 48.5% with respect to the imports that were registered in 2020.
An interesting commercial fact is that China, with US $2.3 billion, is the country’s second-largest supplier of imported goods (only behind the United States). In terms of Salvadoran exports, the Asian country does not even appear among the top ten buyers of goods from El Salvador.
On the other hand, within the comparison of data presented by the ASI, it can be observed that during 2021 the number of exporting companies also increased. The number rose to 2,453 companies. This represents the addition of 192 companies more than in 2020.
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