(QCOSTARICA) A decline in foreign trade has been offset by the 4.33% increase in domestic consumption resulting in a GDP growth of 2.68% in the first quarter.
Consumption by the Government and families have seen the same upward trend since 2013, a situation that compensates for the decline in private investment in the last quarter, which is maintaining a downward trend, extending a decline that has already been going on for six quarters.
In an article in Nacion.com, Olivier Castro, president of the Central Bank (Banco Central de Costa Rica – BCCR), said that “… a downward adjustment is forecast for growth of the Costa Rican economy this year”, which is supported by economists and businessmen who “… doubt that GDP will be maintained further if the external sector stays ” resentful” and with negative changes.”
“… Luis Mesalles, director of the Costa Rican Union of Chambers and Associations of Private Enterprises (Unión Costarricense de Cámaras y Asociaciones del Sector Empresarial Privado – Uccaep), it is difficult to believe that domestic consumption will maintain its growth and manage to ‘carry’ the rest of the economy with it. ”
“Lower production means it will be very difficult to lower the unemployment and underemployment. Also, the real income of people can not grow much, ” said Mesalles.
José Luis Arce, an economist at the Economic and Financial Advisers (Consejeros Económicos y Financieros – CEFSA), said the pessimism of entrepreneurs and families has lowered investment and will reduce the rise in GDP in the future.
Production growth in the first quarter was led by construction, financial services and insurance, plus transport, storage and communications.
“We will have an industry that will continue to slow the rest of the year and with a slight improvement at the end of 2015,” said Francisco Gamboa, executive director of the Chamber of Industries ( Cámara de Industrias).
Agriculture was the only Costa Rican productive sector that had a negative production, falling 1.4%.
Alberto Franco, economist at Ecoanálisis, said that the climatic effects of El Niño will result in lower production for the rest of the year. Banana and pineapple are among the most affected by the rains, while livestock has been hit by droughts in Guanacaste.
Source: Nacion.com
I rest my case. From how many more credible sources does the Government of Costa Rica require confirmation of the current economic decline in the Country and the solutions necessary to curtail it?
I’m lost. How can you rest your case based upon this gibberish? And what case?
What I see is that consumption remains steady, no sign of a downturn there, and while there is an uptick in government consumption, if you’re at all Keynesian, this is what should be happening. I also see that rains have hurt banana and pineapples–hey, it happens, but rains don’t last forever–but construction (usually a sign of growth) is up. Financial services are up too. Usually this is a good sign, but maybe here it only means that banks are issuing more credit cards with 50% interest. The only alarm I hear ringing is that some “external sector,” whoever they are (I infer foreigners like you and me, albeit richer) are “resentful,” but nothing tells me what they resent or why I should care. Is the theory here that Ticos can only make a buck if some resentful foreign investors bankroll them, since clearly the Ticos are too incompetent to do anything on their own?
Anyway, I don’t follow. I’m not saying you’re wrong, only that I don’t understand what you’re extracting from this cryptic news article that doesn’t tells anyone much of anything–except that the “external sector” has a bad attitude and rains have hurt bananas and pineapples.
Well, I think there should be a legislative commission to look into, then some type of poll and lets get the census people working, going door-to-door to hear from the people.
Yes, the democratic process according to Costa Rica, where everything is studied to death, but no prudent action is ever taken until it’s too late to be of use.