Puerto Rico Economic Outlook
After momentum was set back towards the end of Q2 FY 2023 (July–September 2022) when hurricane Fiona landed on the island, data suggests the economy has improved. Economic activity has recorded smaller year-on-year drops since November 2022, and in February 2023, it tallied the smallest decline in six months. Consequently, in the first eight months of FY 2023, activity slid 0.3% year on year on average. Meanwhile, merchandise exports grew by nearly 10% in the first eight months of FY 2023. Additionally, in H2 FY 2023 (January–June 2023), consumer spending has likely improved so far; price pressures receded in January–March, and the unemployment rate fell to its lowest level since at least April–June 1990 in the same period, giving purchasing power some breathing room.
Puerto Rico Inflation
In March, inflation dropped to a one-year low of 5.1% (February: 5.8%); softer price increases for transportation, and food and beverages drove the moderation. In FY 2024—which starts July 2023—inflation is expected to more than halve from FY 2023’s projected peak. Energy prices and extreme weather events are risks.
This chart displays Economic Growth (GDP, annual variation in %) for Puerto Rico from 2013 to 2022.