Q2 2014: PR’s Demographic Crisis

Compared with other states in the US mainland, Puerto Rico ranks 38th in terms of GDP. This economy is facing yet another crisis, a demographic time bomb. In 2013 official statistics indicated that the population declined by a record 40,000 people—roughly the population of the Municipality of Vega Alta. PR’s population started falling in fiscal 2005 and is now ageing even faster. More than 17% of Puerto Ricans are already 65 or older. According to projections by the PR Planning Board, the number of PR residents will fall from 3.6m to about 3.3m by 2020. Besides an ageing population, the major cause for population shrinkage is migration. About 97% of PR emigrants go to the US. This demographic outlook presents great challenges for various economic sectors, such as, labor, real estate, retail, banking, pension retirement systems, tax revenues, and the whole economy. Find out how a declining population in Puerto Rico impacts the island’s key economic indicators.