Puerto Rico Economic Pulse ©

March 2009: Puerto Rico’s Economy in a Balancing Act

Performance of the PR and US economies in fiscal 2008 and forecasts to 2011

An era of fiscal deficits and oversized government may be ending but how long will it take the PR economy to regain healthy growth without the help of the US? With the world economy in its worst crisis in 70 years, every country needs to do its bit to rekindle global demand. President Barack Obama and his economic team are already racing against the clock to try and fix the US economy with trillion-dollar programs. The forecast for the US economy is recession in fiscal 2009 and 2010. Locally, Governor Fortuño is implementing a $500 million Criollo Plan, but trying to eliminate a $3.2 billion deficit in the short term may deepen the island’s recession. Under these conditions, PR’s recovery is like running into a 40-mile-an-hour headwind. Hard choices are still ahead.