The pessimism expressed by consumers in Costa Rica and the constant deterioration of business expectations in Guatemala reflect part of the complex challenges faced by Central American economies this year.
Thursday, February 28, 2019
A report prepared by the School of Statistics of the University of Costa Rica (UCR) shows the negative trend that come showing the economic expectations, because between February 2018 and the same month of 2019, the Consumer Confidence Index (ICC) fell 15%.
Although comparing the ICC figures reported between November 2018 and February 2019, a slight improvement is shown, with a 23% increase in the index, consumer expectations remain pessimistic.
Johnny Madrigal, UCR researcher, told Nacion.com that "... It's quite likely that the passage of the tax reform has made consumers feel less pessimistic. Confidence increased equally across all population groups, i.e. by age, sex and education levels. However, this rebound is not enough to be considered 'optimistic'."
The article adds that "... When consulting consumers about their current economic conditions, 38.3% think they are worse off now than they were a year ago. While 60.3% think it's a bad time to buy household goods. Regarding their future expectations, 37.6% say that economically they will be worse within a year, 50.6% think that the economic situation of companies will worsen next year and 59.1% project that in the next five years the country will have periods of crisis."
Costa Rica is not the only country in the region that began the year with adverse expectations, since in Guatemala, after the Confidence in Economic Activity Index reported a 8% year-on-year increase in December 2018, it fell 3% in January compared to the same month in 2017.
The Bank of Guatemala reported that "... In January 2019, the level of the Confidence Index of Economic Activity was at 47.76 points, lower by 2.15% regarding the registered in December 2018 (48.81 points) and lower by 2.97% to the registered in January 2018 (49.22 points)."
Between February and May of this year the Consumer Confidence Index registered a 40% drop, which was caused by the health and economic crisis resulting from the covid-19 outbreak.
According to the Consumer Confidence survey conducted by the University of Costa Rica, between August and November 2019 the Consumer Confidence Index (CCI) rose from 28.5 to 32.3, however, by May of this year it had fallen to 19.7.
Although the Consumer Confidence Index reports increases in the last two quarters, the perception of the country's economy continues to be pessimistic.
According to the Consumer Confidence survey, conducted by the University of Costa Rica, between August and November 2019 the Consumer Confidence Index (CCI) rose from 28.5 to 32.3, and by February this year it had risen to 37.
Between the third and fourth quarters of the year, the Global Expectations Index reported a 6% increase in Costa Rica, but still remains in pessimistic territory.
The expectations index improved in all sectors during the fourth quarter, with the services and manufacturing indexes strengthening the most compared to three months ago.
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