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Puerto Rico is set to become the world’s worst economy next year
9 months ago admin2 Comments Off on Puerto Rico is set to become the world’s worst economy next year
The true extent of Hurricane Maria’s damage to Puerto Rico is still being tallied. But here’s a good indication of how bad it will be—the island’s economy will shrink by about 8% in 2018, according to a November forecast by the Economist Intelligence Unit.
That puts Puerto Rico at the top of the list of the slowest-growing economies in the world.
Puerto Rico might have made it on that list even if hadn’t been hit by the Category 4 storm on Sept. 20, but it likely wouldn’t have been at the top. Last year, the island’s economy contracted by closer to 1%, according to government estimates.
For years, the US territory has been struggling to curb an exodus of jobs and working-age people to the mainland, and a ballooning public debt. Earlier this year, its government filed for bankruptcy.
Maria has made those problems worse. Thousands of businesses have been unable to open due to ongoing blackouts more than two months after the storm. The island lost around 29,000 jobs in October, according to preliminary official statistics. That number could quickly rise. Some 175,000 employed people reported they weren’t able to work that month due to hurricane-related complications. Another 100,000 have simply left the island.
The drain means that businesses will have fewer customers and the government will collect fewer taxes, sinking Puerto Rico deeper into its debt crisis.
Puerto Rico is getting help from the federal government, but it won’t be enough to stave off a sharp decline in the island’s economy, according to EIU’s analysis (paywall).