Puerto Rico Compass ©

Q3 2012: Striving for Economic Growth

Quarterly analysis of the PR economy in Q3-2012

With elections just around the corner, contenders are doing their best to convince voters that they have the solution for all economic issues. Promises of job creation, economic growth, and fiscal balance are everyday fare. However, economic reality is different from these political ads. None of our 6 quarterly economic indices has returned to pre-recession levels. Real GNP is 11% below FY 2006. Unemployment in September 2012 was 3.4% higher than in 2005 and the employment rate was at its lowest in three decades. Whoever wins the election will face a Herculean task of first, returning to pre-recession levels and then, recover the path to growth. Q3 results in 2012 still reveal that Puerto Rico continues to strive for growth but has yet to go some distance in order to regain even pre-recession levels of 2006. The road back to normality will require some structural changes and a vision of growth for the Island.

Puerto Rico Economic Pulse ©

September 2012: Beyond Economic Challenges

Getting back to fundamentals

“We the people” in Puerto Rico face daunting economic challenges now and in coming years. These challenges include a stagnant economy; a declining manufacturing sector, once the main driver of economic growth; ever higher dependence on federal funds; unhealthy level of public debt; a labor market that feeds on unemployment and few job opportunities; an ageing population that is insatiable in its health demands; an oil dependence that generates imbalances in all sectors; and mounting government deficits that threaten the use of scarce government revenues. Yes, there is always plenty to do, and now is no exception. It is important to maintain a perspective about this, particularly in light of upcoming elections in the Island. The key question is whether the economy is well poised for positive and innovative growth or if Puerto Rico doesn`t soon get its act together a long decline looms ahead.