Puerto Rico Economic Pulse ©

March 2000: Journey Inside a Record Year

The Shape of the PR economy in 1999 and Forecast for 2000 and 2001

The economy of carefree consumers and builders rolled on last year, widely fueled by the destruction of Hurricane Goerges in 1998.  Was the 42% growth of the Puerto Rico economy in 1999 significant?  With higher oil prices and interest rates, is the growth sustainable?  Have we become less oil dependent?  How real is low unemployment?  Arguably equally important is the enhanced role of investments as opposed to government aid in personal income.  Perhaps this is the result of a new entrepreneurial culture.  Uncover facts you didn`t know about PR.

Puerto Rico Economic Pulse ©

February 2000: Speeding the Markets

Insights into how the last 10 years changed banks in Puerto Rico

Economic prosperity in the U.S. and Puerto Rico in the 1990`s has helped skyrocket the local commercial banking sector. A consolidation wave eliminated more than half the commercial banks that were present in 1989. How have banks reacted to a changing depository environment over the past ten years? Are banks coping with the end of Section 936 benefits? Will the changing federal legislation impact the local banking sector? The 1990`s have also been characterized by rising bankruptcy rates. What is the impact on a bank`s personal loan portfolio? Learn where new loans are coming from and potential pitfalls in the future of loan growth and whether local bank stocks have felt the impact of rising interest rates.

Puerto Rico Economic Pulse ©

January 2000: Puerto Rico`s Changing Telecom Universe

Both consumers and service providers stand to win

Globalization has reshaped economies all around the world transforming local markets into world affairs. Mergers and acquisitions have redefined the might of the players. They are now bigger, more cost-efficient and ever-seeking a competitive edge. In PR, federal laws and local deregulation acts in 1990 and particularly in 1996 have redefined what telecommunications are all about. This highly technologically driven sector is changing faster than a speeding bullet. More services, new technologies, lower competitive prices are just some of the features in this new universe. With the sale of publicly owned PRTC, can we expect more competition? Find out where all this is going.

Puerto Rico Economic Pulse ©

December 1999: Breaking into the New Millennium

A Review of Economic Events in 1999

This has been the year in which more money has been pumped into the megaprojects of the Super aqueduct, the Urban Train, and highway construction. The six-year old health care reform plan for the medically indigent is already in need of reform. The disaster of Hurricane Gorges in September 1998 turned out to be a blessing in disguise, propelling the economy to 4.2% real growth in fiscal 99. Our consumers kept breaking sales records. But depending on the two C`s: construction and consumption may be too complacent for the economic outlook in year 2000. Although, not an alarming fact, it does cast some doubt as to our ability to stay on the path of growth. As we break into the new millennium, we face an election year crammed with challenges and issues for the new gubernatorial candidates. Find out how a review of the major headlines during the year provides some clues on the economy at least for the next twelve months.

Puerto Rico Economic Pulse ©

November 1999: A Criollo Baby Boom in Puerto Rico

Insights into how demographic trends impact business

Learn how changes in age composition can affect your business. Puerto Rico has become an important consuming market, considered by many as one of the youngest markets in the world. But will Baby Boomers soon begin to show their wrinkles? Find out which age bracket will have the highest growth in spending power. The next 20 years could see a fundamental restructuring of how workers fund retirees. Timely reaction to these consequences will enable retailers to understand and reach the elusive moving target… customers.

Puerto Rico Economic Pulse ©

October 1999: The Contribution of International Banking to PR

Results since the law was amended in 1989

As time goes by, the international or offshore banking plays an important role in a country`s financial development. Puerto Rico is no exception and has hitched on to this bandwagon. But, how effective have IBEs been since the law was amended in 1989? The emergence of financial institutions that establish their operations outside their home country is supposed to help the host country attain more economic development. Has the opening of subsidiaries in Puerto Rico by offshore institutions generated more jobs? Are the jobs created more sophisticated, highly skilled, and technologically oriented? Find out what has been the contribution of these entities to PR.

Puerto Rico Economic Pulse ©

September 1999: Can Rising Interest Rates Put the Brakes on the Economic Expansion?

How Sensitive is the Puerto Rico Economy to Interest Rates?

A gyrating US stock market has made investors fearful of interest rate hikes. Is that panic justified in Puerto Rico? Financial market deregulation and innovation, along with the rising importance of globalization have changed the structure of Puerto Rico`s economy. Our empirical evidence suggests a reduction in the economy`s overall interest sensitivity. This reduction is not spread equally across all sectors of the economy, however compsumption and residential investment have become less interest sensitive, while net exports now fall rather than rise in response to an interest rate hike.

Puerto Rico Economic Pulse ©

August 1999: The Puerto Rican Miracle: How to Spend Beyond Your Means

An X-Ray of our consumption Patterns, causes and effects

By international standards, our share of consumption in GNP exceeds 93% of all countries in the world yet our income is barely a third of Mississippi`s per capita income. The consumer sector in Puerto Rico does not appear severely strained by low savings. Dramatic use and availability of credit is partly the explanation. Find out how the average consumer spends its income; why, despite a revolutionary health care reform, we are spending more on health and less on food. And, are we really spending less on education? In assessing whether the household sector has become overextended, debt balances provide some answers and worries as interest rates start to rise again.

Puerto Rico Economic Pulse ©

July 1999: Where will the new jobs come from?

Can Rising Interest Rates Put the Brakes on the Economic Expansion?

A low unemployment rate in Puerto Rico does not necessarily mean more jobs are being created. Discourage workers leave the labor force and this artificially reduces unemployment. By international comparisons, the island`s 78% share of services in employment surpasses Europe, Latin America (64%), and most country (29%). During the past twenty year, services have grown uninterruptedly. Services is the big winner and manufacturing is the big loser in jobs but not in wages. Brainpower is wanted with Professional and Managers experiencing the highest demand. Learn about the risks of Puerto Rico`s secret weapon to achieve economic development.

Puerto Rico Economic Pulse ©

June 1999: Is Puerto Rico Ready for Regional Competition?

The new economic model arises out of this need

It has become second nature to assume that Puerto Rico is essentially an integrated economic region of the United States. There are, however, some key sectors of the Puerto Rican economy that can be affected by other Caribbean economies in the region. Specifically, tourism and services represent two areas that must fight for a share of the regional markets. Furthermore, these are two of the strategic areas in the new model for PR. It is, then important to find out how Puerto Rico fares in the region. Newly integrated world and regional markets and the possibility of further Cuban competition only stress the need for Puerto Rican businesses to be prepared. Learn how PR is doing and what it can do to maintain its position in the region.