SAN JUAN – Puerto Rico’s economy will contract by 1.2 percent during the current fiscal year, which ends on June 30, and 2 percent over the following 12-month period, according to the local Planning Board.
But in a report sent this week to Gov. Alejandro Garcia Padilla and published on its Web site, the Planning Board noted that the economic situation on the U.S. commonwealth was very uncertain and that its projections therefore could fluctuate significantly.
The Planning Board projects further contraction in personal consumption, which fell 0.3 percent in fiscal 2015 and is expected to decline by 1.2 percent in fiscal 2016 and by 1.6 percent in fiscal 2017.
Spending by tourist arrivals, however, is projected to rise by 7 percent in fiscal 2016 and 4.9 percent over the following 12-month period, according to the Planning Board, which made no reference to any potential impact of the spread of the Zika virus.
The construction sector is projected to shrink by 6.8 percent and 6.6 percent this fiscal year and the next, which would be the fourth and fifth consecutive years of contraction.
Federal transfer payments to Puerto Rico in fiscal year 2015 amounted to $16.3 billion and are expected to climb by 0.3 percent and 0.4 percent, respectively, in fiscal 2016 and fiscal 2017.
Puerto Rico has been in recession for a decade and is racked by a severe fiscal crisis that led it to default on most of a $422 million debt payment on Monday.
Garcia Padilla’s administration also said it would be forced to default on more bond payments unless the U.S. Congress gives it the legal tools to restructure its roughly $70 billion debt load.