Puerto Rico Economic Pulse ©

January 2011: Will the PR Tax Reform Generate Jobs?

Gaining knowledge on taxes and jobs

As calendar year 2010 nears its end, we take a panoramic view of newsworthy economic events in Puerto Rico. The preface of course is what happened in the rest of the world and which also impacted our economy. The insatiable appetite of China’s exports as well as banking everywhere has touched us. At the start of the year, we were all hopeful that selected government policies would start turning the economy. Instead, we have seen the continuation of what could be described as the longest (4 years) and, so far, deepest economic recession in our modern history. In real terms, the economy’s real GDP has shrunk $767 million since 2006 and the labor market lost 176,000 jobs. Unemployment increased to 16% by October 2010. Indeed, 2010 feels as if 12 years instead of 12 months have elapsed. Policies, jobs, and houses have a lot to do with it.