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Country Report Puerto Rico

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

In a televised message on June 29th, the governor of Puerto Rico, Alejandro García Padilla, announced the appointment of a five-person task force that will approach creditors to start talks on rescheduling the island's US$72bn public debt. Convincing creditors to participate in a debt exchange will prove an uphill task, sustaining risks of a disorderly default that would take the economy further into recession.

All five members of the task force are key figures in the governor's cabinet and members of the ruling Partido Popular Democrático (PPD), including the presidents of both houses in the island's legislature and the president of the Government Development Bank. Critics quickly decried the lack of opposition figures in the group, although it is unlikely that any would have accepted the nomination.

Besides sounding out creditors over rescheduling talks, the task force is also charged with defining the guidelines for a five-year fiscal adjustment plan, creating a non-partisan Fiscal Board to oversee the plan's implementation, and identifying areas for further spending cuts and revenue increases in the government's budget. The group's agenda is largely based around the finding of a report on Puerto Rico's economic and financial conditions prepared by three former IMF economists, including Anne Krueger. The Krueger Report, as it was quickly christened, was also presented officially to the public in San Juan, the capital, a few hours before the Governor's evening broadcast.

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Country Report Puerto Rico

Puerto Rico seeks debt exchange talks with creditors
Task force to propose fiscal adjustments
Puerto Rico seeks US government assistance in several areas

Note: Product cover images may vary from those shown
Note: Product cover images may vary from those shown

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