Puerto Rico Compass ©

Q3 2009: Time Is Running Out for Recovery

Economic indices in Q3 in PR confirm a trend

Stimulus programs provide some relief to deal with the sharp downturn in PR. The federal program CARS (Car Allowance Rebate Program) or cash for clunkers, boosted auto sales in the island but only during August. However, this growth is not sustainable in coming months. Our quarterly indices continue to be negative. The positive effects of ARRA (American Recovery and Reinvestment Act) and LSP (Local Stimulus Plan) are as yet unobserved. Only 18% of the federal stimulus and 5% of the local stimulus have been disbursed. Fixing the $3.2b government deficit has required bitter medicine, including payroll savings, reduction in operational expenses and contracts, as well as government health plan savings, among others. This led to $1.2 million in savings as of October. Come November 6 of this year, 21,807 public employees will lose their jobs. Time is running out for government and the private sector to start the recovery.