SALVADORAN ECONOMIC SITUATION 2010

JUNE 25 , 2010

World and Central American Economy

WORLD ECONOMIC GROWTH 2005-2010

COUNTRY/YEARS 2005 2006 2007 2008 2009 2010WORLD 4.5% 5.1% 5.2% 3.0% -1.1% 3.1%USA 3.1% 2.7% 2.1% 0.4% -2.7% 1.5%EU 1.6% 2.8% 2.7% 0.7% -4.2% 0.3%CHINA 10.4% 11.6% 13.0% 9.0% 8.5% 9.0%LATIN AMERICA 4.7% 5.7% 5.7% 4.2% -2.5% 2.9%CENTRAL AMERICA 4.5% 5.8% 5.7% 3.1% -1.4% 1.4%SOURCE: SIECA AND IMF

GDP GROWTH EVOLUTION, 2005-2010

COUNTRIES 2005 2006 2007 2008 2009 2010 (A) AVERAGEGUATEMALA 3.3 5.4 6.3 3.3 0.6 1.3 3.4EL SALVADOR 3.1 4.2 4.7 2.5 -3.3 0.5 2.0HONDURAS 6.1 6.6 6.3 4.2 -2.1 2.0 3.9NICARAGUA 4.3 3.9 3.2 3.2 -1.0 1.0 2.4COSTA RICA 5.9 8.8 7.8 2.3 -1.3 2.3 4.3AVERAGE 4.5 5.8 5.7 3.1 -1.4 1.4 3.2SOURCE: SIECA AND IMF(A) PROJECTIONS IMF

Salvadorean Economic Situation

Real Sector and Prices

Real GDP Growth

-10.0

-5.0

0.0

5.0

10.0

15.01

96

0

19

62

19

64

19

66

19

68

19

70

19

72

19

74

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

4.1

3.5

12

.04

.39

.35

.47

.25

.43

.2 3.5

3.0

4.8 5

.55

.16

.45

.64

.06

.1 6.4

-1.7

-8.7 -8

.3-5

.61

.51

.30

.60

.22

.51

.91

.04

.83

.67

.4 7.5

6.2 6.4

1.7

4.2

3.7

3.4

2.2

1.7 2

.32

.31

.8 2.8

4.2 4.7

2.5

-3.5

percentage

Total National Consumption(% of GDP)

Internal Gross Investment% of GDP

IVAE UP TO MARCH 2010

SALES INDICATOR OF FUSADES

EMPLOYMENT INDICATOR OF FUSADES

2010 GDP GROWTH PROJECTIONS

QUARTERS PESIMIST BASE OPTIMIST

I QUARTER -5.0 -4.0 -3.0II QUARTER -4.0 -3.0 -2.0III QUARTER -2.0 0.0 1.0IV QUARTER 0.0 1.0 2.0AVERAGE -2.8 -1.5 -0.5Source: Own projections

Annual Inflation(In percentage)

-5

0

5

10

15

20

25

30

35

4019

60

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

-0.1

-2.8

0.2 1.

51.

60.

7-1

.21.

4 2.6

-0.2

2.8

0.4 1.

66.

316

.9 19.2

7.0

11.8 13

.1 14.8

18.6

11.6 13

.4 14.8

9.8

31.9

30.3

19.6

18.2

23.5

19.3

9.8

20.0

16.0

5.2

11.4

7.4

1.9 4.

2-1

.04.

31.

4 2.8

2.5

5.4

4.3 4.9

4.9 5.5

-0.2

porcentaje

AÑOS

Fuente: Banco Central de Reserva

Nota: Inflación promedio anual de 1960 a 1979. Inflación punto a punto de 1980 a 2009. En 2009 inflación anual a octubre

3.73.2

3.64.3

5.4

6.2

4.94.7

5.86.0

6.8

8.49.0

9.69.9

8.7

7.4

5.3

5.5

4.03.3

3.3

2.3

1.2 0.2

-1.6-1.4

-0.2

0.81.00.90.70.5

-4

-2

0

2

4

6

8

10

jun-

07

ag

o-07

oct

-07

dic-

07

feb-0

8

ab

r-08

jun-

08

ag

o-08

oct

-08

dic-

08

feb-0

9

ab

r-09

jun-

09

ag

o-09

oct

-09

dic-

09

feb-1

0

ab

r-10

Consumer Price Index

External Sector

Trade Balance as of april 2010

Source: Central Bank of El Salvador

Anual Growth2006 2007 2008 2009 Apr-2009(p) Apr-2010 Apr-2010

  1  Exports - fob 3705.6 3984.1 4549.1 3797.3 1272.1 1434.3 12.8

  1.1  Traditionals 262.6 259.7 334.7 319 139.3 182.4 30.9

  1.1.1   Coffee 1/ 188.7 187.2 258.7 230.3 113.1 116.9 3.4

  1.1.2  Cotton 0 0 0 0 0 0 -.-

  1.1.3  Sugar 71.5 72 75.5 88.4 26.2 65.5 149.5

  1.1.4  Shrimp 2.3 0.7 0.5 0.4 0 0.1 86.2

  1.2  Non Traditionals 1667.6 1920.4 2286 1990.9 652.2 758.5 16.3

  1.2.1  Central America 1031 1203.8 1426.7 1277 404.7 489.9 21

  1.2.2  Rest of the World 636.5 716.5 859.3 714 247.4 268.6 8.6

  1.3  Maquila 1775.4 1803.8 1928.3 1487.4 480.6 493.4 2.7

  2   Imports -CIF 7662.7 8711.7 9754.4 7254.7 2313.3 2715.7 17.4

  2.1  Central America 1161.1 1332.5 1479.2 1356.8 457.3 482.4 5.5

  2.2  Rest of the World 5358.7 6142.8 6993.5 5059 1592.5 1906.2 19.7

  2.3  Maquila 1143 1236.5 1281.7 839 263.6 327.2 24.1

  3  Merchandise Trade -3957.1 -4727.7 -5205.3 -3457.4 -1041.2 -1281.4 23.1

TransactionsAccumulated Flows to period of reference

Economic Classification of Imports April 2010(In millions de US $ and percentages)

Anual Growth2006 2007 2008 2009 Apr-2009(p) Apr-2010 Apr-2010

  1  Consumer Goods 2425.5 2821.2 2974.1 2602.2 840.6 904.3 7.6  1.1  Non Durables 1984.2 2251.9 2514.3 2226 731 782.9 7.1  1.1.1  Petroleum's oils 363.7 500.1 607.7 376.3 105.7 181.2 71.5  1.2  Durables 441.4 569 459.7 376.2 109.6 121.4 10.8  2  Intermediates 2878 3289.1 4157.3 2801.7 850.3 1148 35  2.1  Manufacture Indus. 2306.4 2666.7 3341.2 2251.7 671.9 944.6 40.6  2.1.1  Petroleum 375.2 458.3 629.4 367.7 105.2 175.7 67

  2.1.2  Petroleum's oils 1/ 339.5 447.7 627.9 341.5 88.7 170.6 92.3  2.2  Agricultural 141.4 179.1 239.9 206.2 58 61.6 6.1  2.2.1  Fertilizers 42.8 66.6 108 87 13.8 13.9 0.5  2.3  Construcction 394.6 401 526 284.4 96.1 123.1 28.1  2.4  Others 35.7 42.1 50.7 59.3 24.1 18.7 -22.6  3  CAPITAL GOODS 1216.4 1365.1 1341.4 1011.9 359 336.3 -6.3  3.1  Manufacture Industry 357.6 423.8 455.6 370.1 128.5 127.6 -0.7  3.2  Transport 445 563.3 473.1 327 106.6 99.9 -6.3  3.2.1  Vehiculs 91.2 119.3 90.1 67.9 20.5 21.6 5.7  3.3  Agricultural 17.8 20.7 19.9 14 4.4 7.7 74.2  3.4  Construcction 81.4 81.3 101.4 78.5 24.2 29.2 20.8  3.5  Commerce 137.6 115.3 113 87.5 28.1 35.7 27.1  3.6  Services 43.5 38.1 53.3 34 11.9 10.6 -10.7  3.7  Electric, Water and Services 132.7 121.9 124.3 100.3 55.1 25.3 -54.1  3.8  Banking 0.4 1 1.1 0.5 0.1 0.2 156.7  3.9  Others 0 0 0 0 0 0 -.-  4  MAQUILA 1143 1236.5 1281.6 839 263.6 327.2 24.1  5  TOTAL 7662.7 8711.7 9754.5 7254.8 2313.4 2715.7 17.4

TransactionsAccumulated Flows to period of reference

Family Remittances Annual and Growths

FAMILY REMITTANCESGROWTH % ANNUALIZED 2008 AND 2009

1.7

10.9

5.7

9.1

4.6

7.9

2.3

-2.1

8.2

-6.0-6.6

-3.9

-8.4-7.8

-6.7

-13.2 -12.8-11.6

-13.8

-6.0

-11.1

-7.4

-0.8 -0.3

-6.5

-2.1

8.7

4.86.1

-20

-15

-10

-5

0

5

10

15

ene-08

feb

mar

abr

may

jun

jul

ago

sep

oct

nov

dic

ene-09

feb-09

mar-09

abr-09

may-09

jun-09

jul-09

ago-09

sep-09

oct-09

nov-09

dic-09

ene-10

feb-10

mar-10

abr-10

may-10

Balance of Payments 2005-2009(In millions of US$)

BALANZA DE PAGOS 2005-2009(En millones de US$)

CUENTAS 2005 2006 2007 2008 2009Cuenta Corriente (% del PIB) -3.3% -3.6% -5.5% -7.2% -1.8%Cuenta Corriente (US$) -569 -675 -1119 -1596 -390 Balanza Comercial -2938 -3540 -4073 -4394 -2790 Exportaciones bienes (f.o.b.) 3447 3760 4035 4611 3886 Importaciones de bienes (f.o.b) -6385 -7299 -8108 -9004 -6677 Servicios -87 -79 -242 -498 -487 Ingresos -579 -528 -579 -536 -609 De los cuales: intereses deuda pública -328 -342 -315 -245 -230Transferencias Corrientes 3035 3472 3776 3832 3496

Cuenta de Capital y financiera 875 1129 750 1714 656 Cuenta de Capital 94 97 150 80 124 Flujos financieros sector público 343 497 -115 277 1388 De los cuales: Desembolsos 727 901 205 577 1678 De los cuales: Amortizaciones -385 -404 -320 -300 -290 Flujos financieros sector privado 439 535 715 1357 -856 Inversión extranjera directa 398 245 1426 719 98 Bancos comerciales -51 -209 -467 143 -461 Otros 92 498 -244 495 -493

Sustitución de monedas -5 0 0 0 0Errores y omisiones -360 -382 649 216 0

Cambio en reservas netas (-= incremento) 59 -72 -280 -334 -266Fuente: Banco Central de Reserva y FMI

Fuente BCR y FMI

Total Public Debt (Millions of US$ and %)Crec. Anual

2005 2006 2007 2008 Sep-2008(p)Sep-2009(p) Sep-2008(p) 1 Deuda Pública Total 7704 8359 8639 9708 9174.2 10349.1 12.8 1.1 Sector Público No Financiero 6785 7402 7447 7904 7560.1 8307 9.9 1.1.1 Gobierno 6417 6993 7021 7380 7073.1 7758.2 9.7 1.1.1.1 LETES 180 222.3 310.6 583.8 447.2 858.5 92 1.1.2 Resto Del Gobierno General 14.4 14.7 15.4 14.5 15.2 17.8 17.1 1.1.3 Empresas Públicas No Financieras 353.4 394.1 410.4 509.4 471.8 531 12.5 1.2 Sector Público Financiero 723.5 860.9 1131 1479 1382.8 1689.9 22.2 1.3 Banco Central De Reserva 195.3 96.2 61 325.3 231.3 352.2 52.3 2 Deuda Externa Pública 4976 5693 5444 5837 5554.5 5988.3 7.8 2.1 Sector Público No Financiero 4621 5398 5281 5410 5220 5539.8 6.1 2.1.1 Gobierno Central 4263 4998 4864 4895 4742.2 5000.2 5.4 2.1.2 Resto Del Gobierno Gentral 5 5.5 6.2 5.3 6 8.6 43.3 2.1.3 Empresas Públicas No Financieras 353.1 394.1 410.4 509.4 471.8 531 12.5 2.2 Sector Público Financiero 160.2 198.4 102.3 102.5 103.2 96.3 -6.7 2.3 Banco Central De Reserva 195.3 96.2 61 325.3 231.3 352.2 52.3 3 Deuda Interna Pública (Total) 2728 2667 3194 3870 3619.7 4360.8 20.5 3.1 Sector Público No Financiero 2164 2004 2166 2494 2340.1 2767.2 18.3 3.1.1 Gobierno Central 2155 1995 2157 2485 2330.9 2758 18.3 3.1.2 Resto Del Gobierno General 9.4 9.2 9.2 9.2 9.2 9.2 0

3.1.3 Empresas Públicas No Financieras 0.3 0 0 0 0 0 -.- 3.2 Sector Público Financiero 563.3 662.5 1028 1376 1279.6 1593.6 24.5Fuente:Banco Central de Reserva, en basae a cifras del Ministerio de Hacienda y Banco Central de Reserva

Transacciones Saldo a fin de mes o de año

Fuente BCR en base a cifras del Ministerio de Hacienda

Financial and Banking Sector

Total Deposits and Loans Banking System

jun-09 jul-09 Aug-2009 sep-09 oct-09 nov-09 Dec-2009 Jan-2010 feb-10 mar-10 Apr-2010 may-101  Saving Rate1.1  30 days 4.70 4.35 3.99 3.79 3.57 3.36 3.31 3.30 3.28 3.10 2.86 2.701.2  60 days 4.41 3.98 3.72 3.48 3.31 3.22 3.25 3.28 3.15 3.04 2.88 2.841.3  90 days 4.39 4.07 3.78 3.68 3.47 3.33 3.39 3.27 3.16 3.04 2.86 2.771.4  120 days 4.57 4.28 4.08 3.86 3.62 3.45 3.54 3.51 3.39 3.14 3.06 2.831.5  150 days 4.20 4.04 3.80 3.31 3.09 3.16 3.28 3.14 3.02 2.82 2.61 2.711.6  180 days 4.75 4.47 4.19 3.97 3.71 3.63 3.65 3.59 3.57 3.47 3.20 3.101.7  360 days 4.85 4.45 4.26 4.10 3.76 3.51 3.61 3.50 3.46 3.42 3.34 3.292  Loan Rate2.1  Loans one year or less 9.51 9.28 9.45 9.22 9.03 9.12 8.42 8.60 8.81 8.22 8.23 7.862.1.1  Personal 10.19 9.97 10.41 10.83 9.72 9.33 11.13 10.45 9.88 11.76 11.27 10.232.1.2  Business 9.31 9.12 9.13 9.06 8.80 8.80 8.17 8.29 8.42 8.09 7.90 7.66

2.2  Loan over one year 11.05 10.95 11.29 10.58 10.75 10.93 10.33 10.81 10.62 10.47 10.64 10.552.2.1  Personal 12.16 12.24 12.40 12.08 11.99 12.25 12.40 12.62 12.72 12.15 12.19 12.312.2.2  Business 10.62 10.43 10.40 9.80 9.86 10.04 9.27 9.93 9.43 8.95 9.28 9.062.2.3  Mortgage 8.94 8.74 8.77 8.72 8.43 8.46 8.56 8.85 8.75 8.55 8.68 8.663  Interbank Loans N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. N.T. 0.714  Repos in stock exchange yield (1-7 days) 1.32 1.58 1.61 1.74 1.55 1.55 1.65 1.84 1.42 1.26 1.30 1.27

INTEREST RATES IN EL SALVADOR

Fiscal Sector

Anual Growth

2006 2007 2008 2009 Apr-2009(p) Apr-2010(p) Apr-2010(p)

  1  Revenues and Grants 3239.8 3659 4016 3584 1282.5 1412.3 10.1

  1.1  Current Revenues 3198.5 3597 3963 3476 1262 1369.3 8.5

1.1.1 Tax Revenues (Net) \1 2487.5 2724 2886 2609 987.1 1095.7 11

  1.1.2  Social Security Contributions 306.2 330.7 351.9 354.6 118.3 119.7 1.2

  1.1.3  Nontax Revenue 246.2 259.7 267.5 218.3 45.9 73.5 60

  1.1.4  Surplus of Operation Public Enterprises 118 110.8 173.9 108.6 39.7 27.7 -30.3

  1.1.5  Transfers from Financials Public 40.5 171.4 284.3 184.6 71 52.7 -25.7

  1.2  Capital Revenues 0 0 0.1 0.1 0 0.1 -.-

  1.3  Foreign Grants 41.3 62.3 52.9 108.7 20.5 42.9 109.2

  2  Total Expenditures and Net Lending 3437.1 3710 4242 4386 1396.8 1378.8 -1.3

  2.1  Current Expenditures 2858.3 3142 3580 3743 1179.6 1161.8 -1.5

  2.1.1  Consumption 2034.3 2137 2351 2533 770.2 783.5 1.7

  2.1.2  Interest 454.9 507.3 519.6 530.9 180.9 158 -12.7

  2.1.3  Current Transfers 369.1 497.9 709.9 679.2 228.5 220.4 -3.5

  2.2  Capital Expenditures 579.5 568.4 661.7 643.1 217.5 216.9 -0.3

  2.2.1  Gross Investment 500 477.6 582.1 581.3 192.3 187.5 -2.5

  2.2.2  Capital Transfers 79.5 90.8 79.7 61.9 25.2 29.4 16.7

  2.3  Net Lending -0.8 -0.8 -0.6 -0.9 -0.4 0 -100

  3  Current Saving 340.2 455 383 -268 82.4 207.4 151.8

  4  Primary Saving (Not including interests) 795.1 962.3 902.6 263.3 263.3 365.4 38.8

  5  Global Surplus (deficit)  5.1  Including Grants -197.2 -50.2 -225 -801 -114.3 33.5 -129.4

  5.2  Excluding Grants -238.5 -113 -278 -910 -134.8 -9.4 -93

TransactionsAccumulated Flows to period of reference

NON PUBLIC FINANCIAL SECTOR FIGURES

EL SALVADOR: OPERACIONES DEL SECTOR PÚBLICO NO FINANCIERO(en porcentaje del PIB)

ProyeccionesCUENTAS 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

1) INGRESOS TOTALES Y DONACIONES 16.3 17.2 17.1 16.9 15.7 17.0 17.7 18.3 18.8 18.91.1) Ingresos Corrientes 16.0 16.9 16.8 16.6 15.4 16.5 17.1 17.9 18.5 18.6 1.1.1) Ingresos tributarios 12.5 13.3 13.4 13.0 12.1 13.1 13.9 14.6 15.2 15.3 1.1.2) Ingresos No tributarios 3.0 3.0 2.9 2.8 2.7 2.7 2.6 2.6 2.6 2.6 1.1.3) Superavit operativos empresas públicas 0.5 0.6 0.5 0.8 0.6 0.7 0.7 0.7 0.7 0.71.2) Ingresos de Capital 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.01.3) Donaciones Oficiales 0.3 0.2 0.3 0.2 0.3 0.5 0.6 0.4 0.3 0.3

2) GASTOS TOTALES 19.3 20.1 19.0 20.0 20.8 21.3 21.0 21.0 20.8 20.72.1) Gastos Corrientes 16.5 17.0 16.3 17.0 17.9 18.2 17.7 17.7 17.5 17.4 2.1.1) Sueldos y salarios 7.1 7.1 6.9 6.9 7.6 7.8 7.7 7.7 7.7 7.7 2.1.2) Bienes y servicios 4.0 3.9 3.6 3.7 4.2 4.1 4.0 3.9 3.9 3.9 2.1.3) Intereses 2.2 2.4 2.5 2.3 2.4 3.0 2.9 3.0 2.9 2.8 2.1.4) Transferencias corrientes 3.2 3.6 3.3 4.0 3.7 3.3 3.1 3.1 3.1 3.12.2) Gastos de Capital 2.8 3.1 2.7 3.0 2.9 3.1 3.3 3.3 3.3 3.3

3) AHORRO CORRIENTE -0.5 -0.1 0.5 -0.3 -2.5 -1.7 -0.6 0.2 1.0 1.24) AHORRO PRIMARIO -0.8 -0.5 0.6 -0.8 -2.7 -1.3 -0.4 0.3 0.9 1.05) SUPERAVIT(DEFICIT) GLOBAL -3.0 -2.9 -1.9 -3.1 -5.1 -4.3 -3.3 -2.7 -2.0 -1.8

Cuentas de Referencia:Deuda Previsional -1.7 -1.8 -1.5 -1.4 -1.5 -1.6 -1.6 -1.6 -1.6 -1.6Necesidades de Financiamiento Bruto 7.1 7.0 5.3 6.1 8.1 7.1 8.6 5.1 4.2 3.9Tasa de Interés Implícita (en porcentaje) 5.3 6.3 6.5 6.5 5.9 6.5 6.4 6.4 6.2 6.2Deuda total del sector público 42.0 41.9 39.1 41.2 47.5 48.4 50.1 49.8 48.3 46.9PIB Nominal (millones de US$) 17073 18669 20392 22051 22164 22941 23938 25360 27248 29105Fuentes: Banco Central de Reserva de El Salvador, Ministerio de Hacienda y estimados FMI1/ Incluye financiamiento de los fideicomisos de educación, salud y pensiones

Operaciones del Sector Público no financiero(en % del PIB)

Fuente BCR, FMI y Ministerio de Hacienda/ 1 Incluye financiamiento de los fideicomisos de educación, salud y pensiones

Projections 2009-2010

SUMMARY PROJECIONES FOR 2009 AND 2010

INDICATOR 2009 2010REAL GDP GROWTH ENTRE -3.1% Y -3.6% ENTRE -0.5% Y -2.8%INFLATION ENTRE -1% Y -2.0% ENTRE 0.0% Y 2.0%FISCAL DEFICIT ENTRE -5.3% Y -5.5% ENTRE -5.0% Y -5.5%CURR. ACC. DEFICIT ENTRE -1.8% Y -2.7% ENTRE -3.0% Y -4.0%

CONCLUSIONS