Puerto Rico’s FY23 growth only 0.3%

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Puerto Rico’s June economic activity index rose 3% from June 2022 and 0.4% from May 2023, but the average monthly growth for fiscal year 2023 was 0.3%.

Compared to the figure for June 2013, the economic activity index was down 2%.

“Unless there is production, we cannot make headway,” Heidi Calero, economist and president of H. Calero Consulting in Puerto Rico, said. “Consumption in an open economy like ours is not conducive to real growth and jobs.”

Less than one-quarter of federal assistance for hurricane recovery has been distributed, she said. “Bids for construction projects have escalated beyond original amounts approved by the federal government and many projects face stagnation.”

Inteligencía Económica Economist Chantal Benet said, “June had a strong increase of 3% compared to June 2022, led by gasoline consumption, electric energy consumption and employment. Still, overall figures for fiscal year 2023 show a slight growth of 0.3%. After the increase of 4.9% in FY 2021 and 1.9% in FY 2022 we can assume the economy is normalizing after the injection of federal funds after COVID.”

In FY23, she noted, some months saw economic contraction resulting from Hurricane Fiona.

“A deceleration phase has begun where the rapid growth seen in all sectors will likely stabilize,” Benet said. “What we’ll need to see is if these industries will normalize to pre-pandemic levels or remain above them.”

Inteligencia Económica released a survey of Puerto Rico conditions and forecasts in late July predicting inflation-adjusted gross national product growth of 1.7% this year, 0.9% in 2024, and 1.1% in 2025. These figures compare to predictions of contraction of 0.7%, 0.2%, and a flat economy for the same years by the Puerto Rico Oversight Board in the Puerto Rico fiscal plan.

The survey said many economic indicators were lower than those for 2022 but still better than in 2019.

Over the long term, the survey noted Puerto Rico’s population went from 3.2 million in 1980 to 3.8 million in 2000 and then back to 3.2 million in 2022.

Median age went to 44.1 in 2021 from 31.1 in 2000. The percentage of households receiving Social Security payments went to 47.3% in 2021 from 41.7% in 2000. And the percentage of households receiving local Nutritional Assistance Program aid went to 49.5% from 47.3% in the same years.

The Economic Development Bank for Puerto Rico compiles the index from four economic measures. On a month-to-month basis, two were up and two were down in June. Compared to a year earlier all four measures were up.

The four measures are total non-farm payroll employment, electric power generation, gasoline consumption, and cement sales. The first and last were down from May 2023 while the other two were up. 

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