The change in methodology implemented by the Central Bank of Costa Rica in the National Accounts System sheds light on problems that cause lack of competitiveness, tax injustice and social inequity.
Wednesday, February 24, 2016
EDITORIAL
An editorial in Nacion.com draws conclusions on the need to adapt the measurement of GDP in Costa Rica, to the changes taking place in the economy at the end of last century and what has elapsed so far in the present one.
The transformation of a predominantly agricultural economy to one based on services was not accompanied by the necessary correlative evolution in concepts related to fiscal policy, educational goals, or protectionism of local production, with this lag causing problems in fiscal inequity, reduced competitiveness against the region and the world, and maintainance of an unacceptable social inequality rate of 20%.
"... The new manual for the Central Bank's National Accounts System, recently published, allows us to learn more about the situation of the productive sectors in the country, feel the structural changes that are occurring and analyze the necessary economic policies needed to address the current challenges and those to come."
"... Most notable is that the production of the country has changed. We went from a mainly agricultural economy to one based mainly on services and with greater involvement of other productive sectors ... ...From this point of view, those politicians who cling to the illusion of a rural economy, as existed in times of our great-grandparents, do us wrong, especially when they are determined to protect it at all costs from the new economy, which is thriving much more, at a significant cost to the consumer. A good example is the protectionist policies of certain agricultural sectors, such as rice and other grains, still in vogue in the MEIC and the MAG. "
The new methodology that the Banco de Guatemala will use to measure the country's production incorporates six new sectors, which are included in the eleven already existing ones.
The Representatives of the Bank of Guatemala (Banguat) informed that in case of private services it will be divided into professional, scientific and technical activities, administrative services and support activities.
Explained mainly by the private consumption expansion, the Gross Domestic Product reported a year-on-year increase of 3% in the first half of the year.
Regarding growth in the second quarter of the year, the Central Reserve Bank (BCR) reported that the production process informed between April and June this year confirms the greatest boom in economic activity announced during the first quarter, so it increased by one-tenth the growth projection for 2018, with an expected rate of 2.6%.
Despite the delicate fiscal context, the Central Bank forecasts GDP growth of between 2.3% and 2.6% for 2017.
In the local context, the Central Bank notes as a potential risk for economic growth the delicate liquidity problem facing the public administration, which is in addition to the structural fiscal deficit, minimizing the potential for growth.On top of his are the high costs incurred both at the public and private level to combat the violence and insecurity affecting the country.
The Nicaraguan economy continues to record high growth rates and sustainable macroeconomic policies, with an average GDP growth of 5.2% in recent years.
Statement issued by the IMF:
IMF Concludes Staff Visit to Nicaragua
Press Release No. 16/191
April 29, 2016
A staff team from the International Monetary Fund (IMF) led by Gerardo Peraza visited Managua during April 25–29, 2016.
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