AAFAF Outlines Positive Economic Outlook for Puerto Rico
Debt has been reduced by roughly 30 percent
Puerto Rico’s Fiscal Agency and Financial Advisory Authority (AAFAF by its Spanish acronym) shared an optimistic outlook for the island’s economic recovery, pointing to key indicators as signs of growth despite the ongoing coronavirus (COVID-19) pandemic.
Speaking at a roundtable with members of the press, AAFAF Executive Director Omar J. Marrero noted that “while hurricanes [Irma and Maria] in late 2017 affected virtually all aspects of the economy sharply and negatively, there are signs of positive recovery. The COVID-19 pandemic has added pressure to Puerto Rico’s economy, along with the rest of the world, but the government is optimistic it can continue its recovery following the pandemic.
With data compiled by the Economic Development Bank, he illustrated that Puerto Rico’s economic activity index experienced dramatic growth from December 2017, three months after the hurricanes devastated the island. Back then, it sunk catastrophically to fewer than 100 index points, and rose to nearly 125 points the following year.
Although these dropped to roughly 110 points in June 2020, just a few months after Puerto Rico detected the coronavirus outbreak, the economy had an uptick by November of the same year, to nearly 115 points.
Meanwhile, data from the Bureau of Labor Statistics reveal that the level of unemployment remains well below that reported in 2017, despite the austere restrictions on businesses and individual activities imposed through the executive orders aimed at mitigating the spread of the virus. However, the level of unemployment reported by Nov. 2020, over 8 percent, still remains above the lowest unemployment rate documented since 2017, which was just below 8 percent in August 2019, per the illustration shared by AAFAF.
Marrero added that the debt restructuring process is helping the government restore its financial credibility, thanks to collaborations between the local government and the Financial Oversight and Management Board (FOMB).
“The government and the FOMB have shown the willingness and ability to reach consensual deals, having restructured over $23 billion of existing indebtedness through the various mechanisms available under PROMESA, resulting in roughly a 30 percent reduction in debt,” he informed.
Fuente: The Weekly Journal