Positive Economic Projections for Puerto Rico

Gustavo Vélez, economist and president of the firm Inteligencia Económica, recently shared with Popular data related to the post-pandemic macroeconomic outlook, highlighting positive projections for Puerto Rico, and emphasizing the fundamental role of small and medium-sized enterprises (SMEs).

Vélez pointed out that Puerto Rico’s economy has experienced significant improvement despite prior challenges like the economic contraction between 2006 and 2017, the impact of Hurricane Maria, the earthquakes, and the COVID-19 pandemic. He highlighted that since late 2020, the island has maintained a positive trend in its economic activity index, showing sustained growth in different sectors such as tourism (hospitality) and gastronomy (restaurants).

“All winds are blowing in favor of Puerto Rico for the first time after everything we’ve lived through,” Vélez said. He added that if the United States experienced a recession, the island would not be affected thanks to its current resources.

Vélez highlighted federal funds’ crucial role in boosting economic expansion on the island, especially during the pandemic.

“There’s talk that the United States could face a small recession. But if a recession occurs there, Puerto Rico can avoid it if it uses all these billions of federal money. This is very important. It means that there is a great possibility of infrastructure investment through federally funded projects. Even if the United States went into recession, this is how Puerto Rico can escape it,” he explained.

“There is a trend towards normalization. We had never received so much money at once, [and] that has caused a general economic expansion,” the expert added.

He also emphasized the important role of SMEs. They encompass most of the businesses and contribute significantly to the island’s economic fabric.

“SMEs are Puerto Rico’s productive economic foundation. At the end of the day, we (business owners) are here no matter what. We stay and find a way to move forward,” Vélez said.

The economist said that estimated growth rates are between 0.7% and 1% for the next 6 to 8 years. This positive outlook is backed by the lowest unemployment rate in Puerto Rico’s history and an increasing average wage, which means greater stability and purchasing power for workers.

SMEs’ participation in our economy is a key factor to achieve a more prosperous and stable future. And Popular is committed to supporting SME owners as they develop their entrepreneurial projects.

This article is for informational purposes only and does not constitute an endorsement nor does it offer any guarantee as to the accuracy or applicability of its content for any particular purpose. Neither Popular nor any of its affiliates, subsidiaries or related companies are or shall be liable for any special, direct or indirect damage resulting from the use of the information contained in this article. If you require any type of advice, you should consult a competent professional of your choice.