Beginning to Gauge Maria’s Effect on Puerto Rico’s Economy
Just two weeks after most of Puerto Rico dodged the proverbial bullet, missing the brunt of Hurricane Irma, the island was devastated by Maria?one of the ten strongest Atlantic hurricanes on record. Making landfall on September 20, 2017, the storm caused not only massive physical destruction and tragic loss of life but also widespread and persistent power outages, shortages of potable (and even nonpotable) running water, and disruptions to telecommunications and travel, among other issues. With the storm boosting costs and disrupting activity, the short-term economic impact is clearly ...
Puerto Rico Post-Maria: Twelve Months of Hardship
Puerto Rico recently observed the one-year anniversary of Hurricane Maria?the most destructive storm to hit the Commonwealth since the San Felipe Segundo hurricane in 1928. Maria, combined with Hurricane Irma, which had glanced the island about two weeks prior, is estimated to have caused nearly 3,000 deaths and tens of billions of dollars of physical damage. Millions went without power for weeks, in most cases months. Basic services?water, sewage, telecommunications, medical care, schools?suffered massive disruptions. While it is difficult to assign a cost to all the suffering endured by ...
U.S. Virgin Islands Struggle while Puerto Rico Rebounds
Two years after hurricanes Irma and Maria wreaked havoc on Puerto Rico and the U.S. Virgin Islands, the two territories? economies have moved in very different directions. When the hurricanes struck, both were already in long economic slumps and had significant fiscal problems. As of the summer of 2019, however, Puerto Rico?s economy was showing considerable signs of improvement since the hurricanes, while the Virgin Islands? economy remained mired in a deep slump through the end of 2018, though signs of a nascent recovery have emerged in 2019. In this post, we assess the contrasting trends ...
The regional economic outlook
Remarks by William C. Dudley, President and Chief Executive Officer, New York, New York.
The causes and consequences of Puerto Rico's declining population
Puerto Rico?s population has been falling for nearly a decade, and the pace of decline has accelerated in recent years. Although a slowdown in the island?s birthrate has contributed to this decline, a surge in the out-migration of its citizens has been a more important factor. The exodus?which includes a large share of younger people?has hastened population aging, but it has not necessarily led to a ?brain drain.? To counter its population loss, Puerto Rico must not only adopt measures to shore up its economy and expand job opportunities, but also enact fiscal reforms and improve the island?s ...
Trends and developments in the economy of Puerto Rico
A two-year-long economic downturn and a persistent income gap with the U.S. mainland contribute to an uncertain outlook for Puerto Rico. Still, the commonwealth possesses a skilled and educated workforce, a favorable business climate, and the benefits of U.S. legal and financial structures - advantages that could encourage the development of new industries and create the potential for sustained growth.
Population Lost: Puerto Rico's Troubling Out-Migration
For the first time in modern history, Puerto Rico is seeing its population decline. This troubling loss can be traced to an exodus of Puerto Rican citizens to the U.S. mainland, a current that has picked up considerably in recent years as Puerto Rico's economy has deteriorated. Today, fully a third of those born in Puerto Rico now reside on the U.S. mainland. In this post, we examine the recent surge in out-migration that is driving Puerto Rico's population decline (which we delve into in more detail in a recent article in the New York Fed's Current Issues in Economics and Finance series), ...
Some Options for Addressing Puerto Rico’s Fiscal Problems
Puerto Rico?s economic and fiscal challenges have been an important focus of work done here at the New York Fed, resulting in two reports (2012 and 2014), several blog posts and one paper in our Current Issues series in just the last few years. As the Commonwealth?s problems have deepened, the Obama administration and Congress have begun discussing potential approaches to addressing them. In this post, we update our previous estimates of Puerto Rico?s outstanding debt and discuss the effect that various forms of bankruptcy protection might have on the Commonwealth.
Restoring Economic Growth In Puerto Rico: Introduction to the Series
The difficult economic and financial issues facing the Commonwealth of Puerto Rico have remained very much in the news since our post on options for addressing its fiscal problems appeared last fall. That post was itself a follow-up on a series of analyses, starting with a 2012 report that detailed the economic challenges facing the Commonwealth. In 2014, we extended that analysis with an update where we focused more closely on the fiscal challenges facing the Island. As the problems deepened, we have continued to examine important related subjects ranging from positive revisions in ...
Migration in Puerto Rico: Is There a Brain Drain?
Given Puerto Rico’s long-term economic malaise and ongoing fiscal crisis, it is no wonder that out-migration of the Island’s residents has picked up. Over the past five years alone, migration has resulted in a net outflow of almost 300,000 people, a staggering loss. It would make matters worse, however, if Puerto Rico were losing an outsized share of its highest-paid workers. But we find that, if anything, Puerto Rico’s migrants are actually tilted somewhat toward the lower end of the skills and earnings spectrum. Still, such a large outflow of potentially productive workers and ...