Archive for economy
Guate In Recession
Posted by: | CommentsIt looks like Guatemala will officially slide into a recession this year, if you consider two quarters of negative growth to be the indicator. Reuters cites Fitch as saying remittances are down 10% this year, and that sector usually accounts for 11% of the economy.
I suspect things will actually get worse, so the end of year number may be close to 1% contraction. So, what do we care?
Well, for one, most recessions leads to a slowing in the inflation rate, which should mean that most things will either not rise in price or will actually get cheaper. If you’re looking to buy real estate around Antigua, I wouldn’t look for a drop in prices, because they’d rather cut off their arm than acknowledge market forces. However, food, wages and domestic goods should be stable.
Unemployment will also rise, aggravated by returning/deported migrants who don’t have any more opportunity in the US than they do here. After all, the US is contracting at a rate twice that of Guate, and the illegals are the first to suffer, since they lack access to social safety nets and formal employment assistance.
GuateTourism Recession Resistant? Not So Much
Posted by: | CommentsWell, I guess this is the third mistake I’ll have to admit to this year, bring my accuracy rating (as verified by the down to 99.1%. elPeriodico is reporting that tourism related income is down by nearly 30% over the same period last year. That number mirrors the drop in revenue of many businesses I’ve talked to around town. The reason?
Carolina López, representante de Promotora Turística Panamericana (PTP), señaló que las ventas de paquetes bajaron hasta un 70 por ciento, las personas ya no están viajando a Guatemala debido a la crisis, el temor a contagiarse de la gripe A H1N1, y el escándalo del asesinato del abogado Rodrigo Rosenberg que le dio la vuelta al mundo y asustó al viajero de negocios (ejecutivos e inversionistas).
If your Spanish is worse than mine and you don’t know how to use Google Translate, this article claims tourists are not coming because they’re worried about the economic crisis, H1N1/FNASF, and the scandal involving the assassination of the attorney who said those unpleasant things about President Colom.
You may recall that in a previous post I mentioned that the Guate economy appeared to be holding strong. If this is still true and the tourist dollars are off, it confirms what I’ve suspected; people are still coming but they’re spending less. I guess if you’re a backpacker, it doesn’t really matter whether the DOW is at 9,000 or 3,000, but all you baby boomers appear to be a little nervous, and with good reason; we haven’t seen the bottom yet.
Guate Economy Recession Resistant?
Posted by: | CommentsThis article cites the World Bank as saying that Guatemala experienced a 0.6% growth in 2009. I assume they are referring to the first quarter of 2009, which would translate into a 2.4% annual growth. That would be great!
Even if the number is half that, it means Guatemala is doing better than you might expect. Keep in mind a true recession is ‘negative growth’, so you would expect to see actual contraction rather than growth. I wonder what the inflation rate is, because if they start printing money like the US and Europe are doing, inflation will go from low single digits where they have been to mid double-digits overnight.
Of course, if you are a contrarian economist like me, you realize that with inflation rates higher than growth rates, you’re like a person who consumes only junk food until he’s full; you’re slowly killing yourself but thinking you’re fine simply because you’re full. I suspect inflation rates in the US, in particular, are much higher than the official numbers, which is why people always feel pinched.
Obama Holding Job Performance Reviews for all Americans
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Obama To Hold Job Performance Review With Every American Worker
GuateTourism Holding Strong
Posted by: | CommentsI’ve gotten a great feel for Antigua & Atitlan by visiting with business owners over the last few months. Good entrepreneurs have their finger on the pulse of a community and can track things not just with spreadsheets but with anecdotal evidence.
What I’ve learned here wouldn’t surprise any experienced businessman, viz., the businesses with strong management, good market niches and a well-executed marketing plan aren’t suffering like those who lack in one of these key areas. For example, while some long-time businesses in town are off 50% from this time last year, other businesses are off by a fraction of that, or even flat. Newer businesses, still in a growth phase, are still growing, although perhaps less than the 20% annual rate they experienced last year.
I hadn’t seen any actual figures until I ran across this blog entry, which indicates Guatemala’s tourism numbers are actually up 4% over last year. When you consider H1N1/FNASF, the economic crisis and the constant bad news about this country, it’s pretty incredible, and reinforces for me how Antigua is unique as a destination (and place to live).
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