Efforts of the Banco Central (Central Bank) have maintained inflation low during 2012 but, the Bacoreports, a slowing of the economy during the past eight months has meant high unemployment.
After a promising start in the early months this year, it was as if the economy ran into a wall of mush as export markets progressively slowed.
The inflation picture here is the best in the past 35 years. For much of the time some three decades ago, the nation faced double digit inflation, especially during the first two years of 1980s during a financial crisis.
The goal of the Central Bank this year was inflation between 4% and 6%, although some doubt this is attainable. Central Bank official Gabriel Alpizar estimates that the year will end no higher than 6.32% inflation.
Alpizar observes that regulated rates on goods and services in the first half of the year rose as did the price of imported petroleum.
But for the third year in a row, stubborn unemployment remained stagnant with about 169,000 persons out of work. The rate of unemployment is expected to be 10.2% at year’s end.
But, despite the grim figure, exports still grew in the face of the slowing trend, although this was seen during the first quarter. Moreover, foreign investment set records, especially in technology, at $574.5 million.
From this, 40 projects developed, according the the economic agency CINDE, resulting in 8,236 new jobs. Production, while disappointing, still remains above that of the Latin American average.
Finance Minister Edgar Ayales estimates that the government deficit will end up around 4.5% of Gross Domestic Product, at a trifle lower than expected despite the lack of success in coming up with a tax reform package.
Four prominant economists consulted by La Nacion preducted that if the Central Bank maintains its system of an acceptible rate of exchange bands, that the situation in 2013 will be much like this year as far as inflation, production, exchange and interest rates are concerned.