Fijatevos/QCostarica

Projections of industrial output for Costa Rica are around 3% for next year, lower than the expected growth of 5% this year. Still, the expected growth for 2013 is better than in many European nations whose outlook is flat.

The year began by causing a euphoria among some government analysts, gaining a remarkable 13.8% in the first quarter over the same period the year before.

A slowing trend during the second quarter produced a still respectable 10.6% more than 2011. Then the rot set in and the third quarter ended with an anemic 1.9% growth.

This will average out, with the final quarter to 5% expected this year. But things look grimmer for next year, although not disastrous.

Juan Ramon Rivera, president of the Chamber of Industries, told the national newspaper La Nacion this week that industry in 2013 may not contribute to the economy by generating new jobs.

Vice President of the chamber Martha Castillo suggests that the number of jobs will probably remain at 154,000 or, at best, increase by only 1% next year.

But Economy Minister Mayi Antillon offered a brighter note, saying that measures to help solve industry’s problems were afoot and would take effect soon. Among those problems were the cost of energy. In the last five years, electricity has shot up from $0.08 per kilowatt hour to between $0.16 and $0.17.

Castillo notes that much of the drop is spurred on by a shrinking demand overseas. Industry accounts for 75% of exports for this country.

Exports, Castillo says, are still expanding but at a much-reduced rate than before. But Castillo refused to make predictions.

While other agencies guage the production, the export promotion agency Promocer looks at values of exports, a brighter picture. Value of overall exports rose 7.8% from January to October this year relative to the same 10 months last year.

Specifically, the value of industrial exports rose 9.7% in that period over 2011.Procomer notes that exports from tax-free zones has increased 11.7% so far this year.

Commentary: The energy picture this year is in part the product of a relative drought that has raised electric rates as water levels plummeted in hydro-electric dams around the country.

This caused the government electrical monopoly ICE to use more expensive fossil fuels to run generators which then caused severe hikes. Moreover, relief is not in sight. Two dams under construction by ICE are woefully behind schedule.

If ICE does not keep up with its high public expectations created in the last century, it threatens to lose more than public face. It could brake foreign investment here due to high energy costs and even cost the country some of its existing industries.

If ICE does not keep up with its high public expectations created in the last century, it threatens to lose more than public face. It could brake foreign investment here due to high energy costs and even cost the country some of its existing industries.


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