Puerto Rico Compass ©

Q2 2012: Why what we are doing isn’t working?

A 2nd Quarter 2012 analysis of PR’s economy

The financial crisis and associated recession originated in the US in early 2008 and its subsequent spread to Europe engulfed most of the economies in both the developed as well as the developing world. US and Europe still experience problems of high unemployment and slow economic growth. In July, the International Monetary Fund lowered its 2012 US real growth estimate to 2% from April’s 2.1%. How does this impact our economy? Puerto Rico is a regional economy of the US. Despite current public policies of fiscal austerity, increased public debt, and efforts to privatize major infrastructure facilities, the reality remains that Puerto Rico is highly integrated with the US economy (71% of PR’s exports got to the US). Without structural changes, Puerto Rico will continue to suffer the effects not only of a slow US growing economy but also of an internally slow growing economy. This issue focuses on the impact of external factors and current policies on a very open economy such as ours.

Puerto Rico Economic Pulse ©

June 2012: The Painful Way Out of the Tunnel

On the lingering crisis of the housing sector in Puerto Rico

Six years ago, in the peak of an unseen frenzy, it was hard to imagine the current crisis in which the Puerto Rico housing sector is now trapped. What began as a disturbing mess in 2007 has turned into a nightmare for developers, bankers, brokers, and the economy as a whole? Past and current administrations have not remained indifferent to housing woes and have squeezed public coffers to get this sector back on track. Public money might have stopped the bleeding, but the housing boat is wrecked and a long awaited rebound does not loom ahead soon. The golden years of housing are gone. An unfortunate combination of demographic and economic factors is standing against housing, and the public and private sectors will have to team up to rescue housing in Puerto Rico. Don’t miss this interesting issue.