Reports
CARIBBEAN MARKET REPORT PUERTO RICO
Economic crisis takes shine off Puerto Rico
Puerto Rico is a U.S. territory and is the fourth-largest island in the Caribbean. Puerto Rico has been under U.S. sovereignty for over a century and Puerto Ricans have been U.S. citizens since 1917.
Officially known as the Commonwealth of Puerto Rico (Estado Libre Asociado de Puerto Rico), it is located in the north-eastern Caribbean, east of the Dominican Republic and west of both the U.S. Virgin Islands and the British Virgin Islands. Puerto Rico’s tropical climate and diverse natural scenery make it a popular destination for travellers from around the world.
Tourism in Puerto Rico attracted 4.2 million visitors in 2013 and 4 million visitors in 2011, a significant increase over 2010 when it stood at 3.68 million. Despite the outbreak of the zica virus in 2016 demand remained strong and Te Puerto Rico Tourism Company (PRTC) announced that it had welcomed ten million
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passengers to Puerto Rico airports by the end of 2016.
But while tourism continues to be a bright spot overall the economic situation is bleak. Since 2005 Puerto Rico’s economy has shrunk by about 10 percent, unemployment stands at over 12 per cent and the country has now run up a bond debt of over US$70bn. Te crisis is down to a number of reasons but most notably an end to the package of US tax incentives which were passed in 1976 and which had originally led to a large number of US multinationals - especially technology and service-oriented companies - coming to the island. After these incentives ended in 2006 companies moved elsewhere and Puerto Rico has since been unable to recoup its
losses. In addition the government borrowed in order to pay for public services and stimulate growth. To make matters worse as the country’s economy plunges further into recession Puerto Ricans are leaving the island in record numbers. Te population has shrunk from 3.8 million in 2005 to 3.5 million today.
In May 2016 the country defaulted on US$422m. Governor Ricardo Rosselló, who was sworn into office earlier this year, warned that the government will not have the funds to pay public employee wages while his predecessor Alejandro Garcia Padilla repeatedly warned that the country simply does not have enough to pay its creditors.
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