Puerto Rico’s economy to contract yet again

Bloomberg

Puerto Rico’s economic recession is poised to worsen as residents continue to leave the island, threatening to deepen the fiscal crisis that’s pushing the island to default on a growing share of its $70 billion of debt.
The Planning Board, which calculates the island’s economic growth, released its fiscal 2017 forecast, estimating a 2 percent drop in gross national product for the fiscal year beginning July 1. The commonwealth agency revised its forecast for the fiscal year ending June 30 to a 1.2 percent drop. The earlier estimate was for a 1.3 percent decline.
The commonwealth’s economy last expanded in fiscal 2012, when it saw a 0.5 percent boost, according to the Planning Board. It’s shrunk by an estimated 16.5 percent since 2007. Puerto Rico and its agencies borrowed as the economy contracted to fill budget shortfalls and now owe $70 billion. Governor Alejandro Garcia Padilla in June 2015 said the commonwealth was unable to repay all of its debts and would seek to reduce those obligations by asking investors to accept losses on their holdings.
A record number of residents left the island last year for work on the U.S. mainland.
Another 240,000 Puerto Ricans are forecast to leave by 2025, according to the Planning Board. Its 11.7 percent jobless rate is higher than any state and double the national
average.
Estimates of the extent of the slowdown were also adjusted for prior years. Projections for fiscal 2015, which ended June 30, 2015, were revised to a drop of 0.6 percent, compared with a prior estimate of a 0.7 percent decline.