El Salvador - GFDRR

110 | El Salvador: Damage, Loss, and Needs Assesment
iv) Evolution of key variables. Economic activity. The real sector of the economy was slightly affected by
Hurricane Ida in November 2009. It is important to point out that the damages and losses affected both
the stock of sectoral assets and the flows in the productive sectors and in infrastructure. The sectoral
analysis showed that the most affected sectors were transportation, environment and agriculture,
followed by water and sanitation, housing, industry, commerce, education, health and services.
In the transportation sector, damages exceeded losses because the damaged infrastructure corresponds
to roads of secondary importance with respect to their connectivity with the city of San Salvador
and with the rest of the country’s departments.
In the agricultural and livestock sector, losses are greater than damages, mainly due to the effect on
future coffee, bean, corn and sugar cane crops.
v) Prices, wages and employment. The inflation rate showed mild variations in the period following
the hurricane due to temporary shortages in products mostly for domestic consumption. Because
supply was reestablished in a timely manner, the temporary price variations were neither significant
nor permanent. The temporary increase in unemployment rates in the affected zones was able to be
offset by rehabilitation and reconstruction activities, and therefore no strong variations are expected.
However, it should be noted that performance during the first quarter of the year already reflected a
deterioration in the number of jobs generated in the economy, so the unemployment rate is likely to
be around 8%.
vi) Evolution of the external sector. The increase in imports will be offset in part by the increasing flow
of family remittances and by a slight upswing in exports, which will generate a current account
deficit equivalent to 2% of the GDP. Therefore, the expected effects of Ida will not be significant in
the current account deficit, despite the small increase in imports, mainly by the imported component
associated with agriculture. Here, a loss of exportable products with an approximate value of US$3.3
million is reported.
As for the service sector and especially tourism, a rapid recovery is expected due to minor damages
and a return to normalcy in reservations and room occupation rates immediately after the emergency.
Finally, there could be a slight rise in regular transfers through family remittances and for reasons of
solidarity, since this has been the case on other occasions. In terms of the capital and financial account, an
increase may be expected due to increases in the flow of capital aimed at reconstruction activities. In turn,
the financial account may reflect increases stemming from more grants from multilateral institutions.
B. IMPACT OF THE DISASTER ON PERSONAL INCOME
Although the disaster’s impact on macroeconomic performance shows that the previous trend in terms
of product growth should not be affected, the fiscal deficit may increase slightly in the short term and
the greater imports required would be balanced by an increase in family remittances from overseas. At
personal level, however, and at least for the next twelve months, income would experience a temporary