Puerto Rico Economic Forecast

Puerto Rico Economic Outlook

June 14, 2022

Available data for Q3 FY 2022 (January–March) painted a mixed picture. The manufacturing PMI logged an all-time high in March amid a significant improvement in new orders and output, while the unemployment rate fell to an all-time low in the same month. That said, the repercussions from the war in Ukraine provided a counterforce to the record-setting improvements. Private spending was likely capped as high commodity prices drove inflation to a 13-year high in March. Similarly, year-on-year export growth tumbled in March following February’s two-year high. Turning to the current quarter, price pressures have hit levels not seen in decades, boding ill for household consumption going forward. Lastly, the House of Representatives recently approved the government budget for FY 2023 totaling USD 12.6 million, which will now need to be approved by the Senate in the following weeks.

Puerto Rico Economic Growth

The economy is set to rebound from FY 2021’s contraction in FY 2022. Fully lifted travel restrictions and ample fiscal support for tourism should buoy the external sector, while public funds recently freed up by debt restructuring should further support growth. That said, persistent pandemic-related risks, decades-high inflation and elevated oil prices weigh on the outlook. Our panelists forecast that GDP will expand 3.7% in FY 2022, which is unchanged from last month’s forecast, and 0.8% 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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