Puerto Rico Economic Pulse ©

March 1998: What will the Future Bring?

As fiscal 1998 unfolds, alarming events in the PR economy have taken place, threatening lower economic growth in 1998 and 1999.  Forty-nine manufacturing companies have either announced or closed operations on the island, a reduction of almost 7,000 jobs.  American Airlines announced its decision to move its hub to Miami.  Chase Manhattan Bank sold its loan portfolio to Banco Bilbao Vizcaya and will thereby close its operations in Puerto Rico.  Contents of this issue assesses the behavior of the economy in fiscal 1997 and the impact of these events on the future growth rates of real GNP, exports, investment, consumption, government expenditures, unemployment, and inflation, among others.

Puerto Rico Economic Pulse ©

February 1998: Inflation:

What is your Wallet Really Worth?

Every day your dollar is worth less. According to the consumer price index (CPI), Puerto Rico faces an inflation rate of almost 5.5% in 1998. This contrasts with the low 2% inflation in the US. If we cannot blame the US for our price increases, where does our inflation come from? This issue looks at the components and statistical measures of the CPI for answers.  Comparisons with the US and other countries will highlight big differences in the housing, education, and food categories.  Consumption patterns of 1977 indicate 41% was spent on food in PR. The US spends 16.3% while Greece spends 36.7%.  As a result, alternative measures of inflation have been suggested.  This issue evaluates and concludes which is the better way to measure inflation.

Puerto Rico Economic Pulse ©

January 1998: Tourism:

An Unrealized Potential

Tourism in Puerto Rico generates employment, income, and production. Still, can this sector afford sustainable growth? In 1997, tourist expenditures amounted to almost 7% of GNP.  Last year, 4.4 million tourists visited the island.  Although cruise passengers represented 25% of all visitors, their expenditures were less than 4% of total expenditures.  Occupancy rates averaged 69% with 8,803 hotel rooms.  Almost 51% of our visitors come from Canada and the US.  This issue is packed with statistics on hotel registrations, accommodations by area, occupancy rates, visitors’ expenditures, international comparisons in terms of room rates and salary structure, and current events that will shape the future of the industry.