Q1 2013: Still, An Uphill Path Ahead

Puerto Rico has a long way to go before it can truly be considered a post recession economy. This Compass analyzes PR’s current economic conditions compared to precession levels in Q1 2006. The island economy is still fragile. The new administration in “La Fortaleza” faces daunting challenges and tough decisions to walk the fine line between fiscal discipline and economic growth. Credit rating agencies, bondholders, and the general public want to see quick results but that is not possible when the problems have remained unsolved for many years. The local fiscal year budget is due on June 30 and the current government has to choose between restrictive fiscal policies (more taxes, less spending) or try to restore growth thru expansive measures (fewer taxes, more spending) or a reasonable combination of both.