Puerto Rico at a Crossroads
By H. Calero Consulting Group Puerto Rico Compass© • 0 Comments

Q2/2019: The Roots of the Problem

Inside Q2-2019 economic indices for Puerto Rico
Puerto Rico still needs to find a new economic compass. At the root lie not only endemic generations of political corruption to which people now have said enough, but a search for new leadership that defines a new vision of economic growth and efficient performance by cabinet members and the private sector. A few of Q2-2019 quarterly indices are in positive territory, but construction and the consumer index are definitely negative. Our leading index is positive, but only barely. There is no definite take-off by Banking, which continues profitable at the expense of car loans. The next 3 to 4 months are not exactly a forecast of economic recovery, a crossroads between stagnation or realizing opportunities in Tourism, housing, and infrastructure, among others. Will President Trump continue with a different assessment of the threats facing PR? This Compass attempts to shed some light on these questions.

The Dire Reality of Most Municipalities The case of Puerto Rico´s municipalities in times of austerity
By H. Calero Consulting Group Puerto Rico Economic Pulse© • 0 Comments

08/2019 The Dire Reality of Most Municipalities: The case of Puerto Rico´s municipalities in times of austerity

The days of business as usual for PR’s 78 municipalities are long gone. What started as sluggish economic growth back in the early 2000s mutated into a full-blown crisis that now includes the highest emigration wave since the 1950s, negative yearly average investment growth since 2010, a default on $72bn of public debt, $49bn in unfunded retirement liabilities, the imposition of a Financial Oversight Board (FOB) and, most importantly, the continued contraction of central government subsidies to the municipalities. In early May 2019, the FOB approved a statute to certify the sustainability of each municipality’s budget. The possibility of lengthy red-tape disbursements for federal reconstruction funds may be the last nails on the coffin of many local governments. Find out why PR’s municipalities face financial distress and what needs to be done. The solution lies in viable regional economic development strategies, which have yet to see the light of day.