Puerto Rico Economic Pulse ©

September 1998: What Georges Left Us

A candid assessment of Hurricane Georges Economic Consequences

On September 21, 1998, Hurricane Georges hard hit Puerto Rico. The imprint of this natural disaster is visible, not only on the transformation of our landscape but also on the thousands of families and businesses, who lost property and revenues.  What is the extent of the damage and how should it be assessed? For instance, the loss of capital is an important damage but GNP figures do not register this loss. What are the economic consequences for the rest of the year? Will the emergency aid, insurance payments, loans, and increased construction activity boost the economy during fiscal years 1999 and 2000? Is Georges our only risk or is the Asian crisis a worst disaster still to hit the island? This article addresses all these questions and provides revised forecasts for real GNP growth for 1999 and 2000 respectively.  Inflation and unemployment will increase further as we break into the millennium.