Analysis by Region - Emerging Markets - Puerto Rico

Analysis by Region - Emerging Markets - Puerto Rico

We've raised our 2023 GDP forecast for Puerto Rico by 0.5ppts to a 0.8% contraction, but have lowered our outlook for 2024 by 1.1ppts to 1.2% growth. Consumer spending and infrastructure projects, backed by federal funds, helped propel Puerto Rico to its strongest annual growth rate in two decades in 2022 at 3.5%, 0.5ppts higher than our estimate six months ago. But these funds mask underlying weaknesses in the economy. Consumers are scaling back spending due to dwindling excess savings and high prices, and a recession forecast is for mainland US in H2 2023.