Puerto Rico 

Puerto Rico landenbeleid

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Puerto Rico landenrapport

Atradius DSB  Economic Research
Country Report last updated :  2 December 2008
Country :  PUERTO RICO 

Political Situation
Not Stable

Head of state
Outgoing president George W. Bush.

Form of government
Outgoing government of the Partido Popular Democratico (PPD), headed by governor Anibal Acevedo Vila.
 
Internal Economic Situation
Bad: Prolonged Recession

General situation
In 2006 the domestic economy was badly hit by cash flow problems in the public sector after years of overspending and lack of political decision. This budgetary crisis unfolded a recession since 2006 which has intensified after the US credit crunch eroded Commonwealth investment funds and the recession on the mainland hits tourism, exports and FDI. Corporate failures are peaking. Especially hurt is the construction/real estate sector. Because of heavy competition from low-cost countries (India, China) several drug makers have closed their plants, aggravating the economic downturn. Inflation has stabilised at appr. 12% p.a. in Sept 2008. Unemployment rate has jumped to 13%, inofficially much higher. Large informal economy. More than half of the population lives below the US-federal poverty line. Weakened financial sector with quickly rising number of NPL’s; overbanked. 
 
External Economic Situation
Weak

Main sources of foreign exchange
Chemicals (esp. pharmaceuticals), electronics, apparel.

Main foreign markets
USA (>90%).

Main expenses of foreign exchange
Consumer goods.

Puerto Rico is part of the US monetary area; US$ is legal tender.