Puerto Rico Economic Forecast

Puerto Rico Economic Outlook

October 11, 2021

After the economy seemingly returned to growth in the fourth quarter of FY 2021 (July 2020–June 2021) amid a region-leading vaccination campaign and the lifting of restrictions throughout the quarter, available data for Q1 FY 2022 (July 2021–June 2022) hints at a potential slowdown. Economic activity growth lost momentum in July, while the unemployment rate averaged considerably higher in July–August, pointing to waning private spending. That said, the manufacturing PMI held strong in the same period. Lastly, on 6 October, lawmakers passed a bill that intends to authorize the sale of new bonds in an effort to restructure nearly USD 20 billion in debt. Although the law intends to both protect pensioners and pave a way out of the territory’s approximately USD 74 billion debt burden, it is already receiving strong public backlash and will face further resistance going forward.

Puerto Rico Economic Growth

The economy is projected to grow at a more moderate pace in FY 2022, partly due to a high base effect. Private spending growth is seen losing steam, although increased holiday travel should buoy the tourism sector. Uncertainty regarding the pandemic, coupled with risks stemming from the current hurricane season, clouds the outlook. Our panelists forecast that GDP will expand 2.0% in FY 2022, which is unchanged from last month’s forecast, and 1.2% in FY 2023

Puerto Rico Economy Data

2015 2016 2017 2018 2019
Population (million)3.53.43.33.23.1
GNP per capita (USD)20,04020,54420,76721,22822,874
GNP (USD bn)69.670.069.067.870.8
Economic Growth (GNP, annual variation in %)-0.8-1.6-3.2-4.21.5
Unemployment Rate12.911.711.510.38.4
Fiscal Balance (% of GDP)-  -  -  -  -  
Public Debt (% of GDP)95.191.892.9-  -  
Inflation Rate (CPI, annual variation in %, eop)-0.20.51.10.60.5
Inflation Rate (CPI, annual variation in %)-0.7-0.31.81.20.1
Current Account (% of GDP)7.29.17.89.77.6
Current Account Balance (USD bn)7.59.58.19.88.0
Trade Balance (USD billion)26.428.425.214.114.3
Exports (USD billion)69.571.771.160.663.7
Imports (USD billion)43.143.345.946.549.4
Exports (annual variation in %)11.53.3-0.9-14.85.1
Imports (annual variation in %)1.20.56.11.16.4

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