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Country Report Puerto Rico Product Image

Country Report Puerto Rico

  • ID: 2138738
  • March 2015
  • Region: Puerto Rico
  • 17 Pages
  • The Economist Intelligence Unit

Monthly output fell by 0.3% in December from November, according to the Government Development Bank's (GDB) Economic Activity Index.

For the first half of the 2014/15 fiscal year (July-June), activity contracted by 1.5% year on year as Puerto Rico continued to struggle to recover from a protracted recession. Private consumption growth remained lacklustre, given a high unemployment rate. Retail sales fell by 0.1% in the first five months of 2014/15 year on year, but the decline in oil prices should help household finances. Consumer prices fell by 0.8% in January, as lower oil prices led to a decline in transportation costs, taking the 12-month inflation rate to -0.9%. Unemployment has been falling from recent highs, to 13.7% in December, but this needs be considered in a context of shrinking employment levels, which fell below the 1m mark in March 2014 and have not recovered.

Fiscal woes are clouding the outlook. The administration is trying to stabilise the public finances and reduce the large public debt burden, which may require debt renegotiation to avert default by one or more of the state-owned corporations. But it has struggled to establish a clear legal framework for possible debt talks, following the invalidation in February by the US Court in San Juan of a special law allowing state-owned companies to go bankrupt.

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Country Report Puerto Rico

Output fell in December
Event
Analysis
Impact on the forecast

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Note: Product cover images may vary from those shown

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