El Salvador: Economy and Trade

El Salvador has the smallest land area in Central America but a densely populated, service-oriented economy, having adopted the US dollar as its official currency in 2001. Key sectors include textiles and apparel manufacturing, agriculture such as coffee and sugar, and a growing services sector, though the economy remains heavily dependent on remittances from Salvadorans living abroad, particularly in the United States.

The United States is by far El Salvador's largest trading partner and source of remittances, which constitute a substantial share of GDP. In 2021, El Salvador became the first country to adopt Bitcoin as legal tender alongside the US dollar, a move intended to attract investment and reduce remittance costs, though its practical adoption and economic impact have been debated. The country continues to face challenges including limited industrial diversification and vulnerability to natural disasters.