Puerto Rico Economic Forecast

Puerto Rico Economic Outlook

November 10, 2020

The economy likely remained downbeat at the outset of the new fiscal year—which began in July—after economic activity started to contract in March due to the outbreak of the pandemic and regular earthquakes. Activity shrank again in August, albeit at the softest pace in four months, pointing to a mild improvement in conditions. Moreover, employment levels rose slightly in September, which should have supported household spending in the month. However, total bankruptcies increased notably in July–September compared to the previous three months. In politics, Pedro Pierluisi of the ruling center-right PNP was elected governor in the 3 November elections. The result, coupled with Joe Biden’s win in the U.S., bodes well for talks on Puerto Rico’s aspirations for statehood status, although it remains an unlikely outcome. Moreover, the results should also ease negotiations with the Financial Oversight Board regarding fiscal adjustments.

Puerto Rico Economic Growth

The economy is set to recover mildly in FY 2021 (July 2020–June 2021), as growth is not expected until the second half of the year due to lingering uncertainty over the evolution of the pandemic and its associated measures weighing on activity. Moreover, recurrent earthquakes pose a downside risk to the outlook. Our panelists forecast that GNP will expand 0.4% in FY 2021, which is down 1.1 percentage points from last month’s forecast and 2.3% in FY 2022.

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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