This Technical Assistance report on El Salvador highlights analysis on the Monthly Volume Indicator of Economic Activity (IMVAE) and institutional sector accounts mission. The mission reviewed the process followed by the National Accounts Department team to consolidate the IMVAE and compile the economic activity indicators established in accordance with the recommendations of the previous mission carried out in September 2017. It found a very thorough analysis and review of the basic statistics available for measuring that indicator. Particularly noteworthy is the magnitude of the interinstitutional effort to provide new information gleaned from the results of the Monthly and Quarterly Economic Surveys, conducted by the Directorate General of Statistics and Censuses with Central Reserve Bank of El Salvador support. The mission suggested to continue to apply the methodology established for compiling and continuously updating the IMVAE, while constantly analyzing the consistency, quality, and timeliness of the calculation of the indicator and its alignment with quarterly data and ensuring that it is consistent with the concepts and guidelines underlying Quarterly National Accounts aggregates.
This Technical Assistance Report discusses the findings and recommendations made by the IMF mission about the compilation of Coordinated Direct Investment Survey and Coordinated Portfolio Investment Survey (CPIS) in El Salvador. The mission recommended the authorities to research the nature of the information available that may be useful for starting the CPIS. This entails discussions regarding the forms designed during the mission for requesting information from new sources. It was also recommended to continue efforts to improve the coverage of surveys applied to nonfinancial private sector enterprises, with emphasis on the largest enterprises that are still reluctant to respond to the balance-of-payments questionnaires.
We use a range of methods and remittance data from 1990 to 2007 to assess the strength and significance of linkages between remittance flows to Latin America and the U.S. business cycle. All of the evidence suggests that remittance flows are relatively insensitive to fluctuations in the U.S. cycle, underlining their role as a stable source of external financing, in good times and bad. A number of factors, notwithstanding uncertainties related to official remittance data reliability, might explain this result, including remittance smoothing and flexible immigrant labor markets.