Puerto Rico

In-depth country-focused analysis on Puerto Rico's economic, political and operational risk environment, complemented by detailed sector insight

Puerto Rico

Our comprehensive assessment of Puerto Rico's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Puerto Rico, as well as the latest industry developments that could impact Puerto Rico's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Puerto Rico before your competitors.

Country Risk

Puerto Rico Country Risk

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Core Views:

  • We believe that rising gold production, a gradually improving tourism sector, and stronger private consumption growth will drive robust real GDP growth rates in the Dominican Republic in the coming years.

  • We expect Puerto Rico to remain in a recession through fiscal year 2015 amid high unemployment and weak investment, and see a high likelihood of debt restructuring by the commonwealth's electric power authority (PREPA) this year.

  • We expect the Cuban economy to accelerate in the coming years, on the back of the government's drive to attract greater levels of investment, and on continued expansion of the consumer sector. This will help to offset weakness in the export sector, and rising demand for imports. 

Major Forecast Changes:

  • We...

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Puerto Rico Country Risk

BMI View:

Core Views:

  • We believe that rising gold production, a gradually improving tourism sector, and stronger private consumption growth will drive robust real GDP growth rates in the Dominican Republic in the coming years.

  • We expect Puerto Rico to remain in a recession through fiscal year 2015 amid high unemployment and weak investment, and see a high likelihood of debt restructuring by the commonwealth's electric power authority (PREPA) in 2015.

  • An agreement struck between the US and Cuba involving the release of prisoners held on both sides is the first major diplomatic breakthrough in the diplomatic relationship between the two countries in generations, and will have far-reaching impacts with regards to the economic and political future of the island nation.

Major Forecast Changes...

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Puerto Rico Industry Coverage (4)

Food & Drink

Puerto Rico Food & Drink

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BMI View: We are turning more positive regarding economic growth in the Caribbean, as structural and financial reforms take hold in the region, tourism numbers pick up and growth becomes stronger in key markets like the US. The large decline in the price of oil over the last nine months will boost the region's consumer spending, as the Caribbean is a large net oil importer. Inflation will remain low, which will help food consumption growth over the coming years. That said, many regional economies continue to be heavily indebted, which limits general investment. We believe that general food...

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Pharmaceuticals & Healthcare

Puerto Rico Pharmaceuticals & Healthcare

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BMI View: There has been very little fluctuation in the forecast for Puerto Rico, indicating that the country's trajectory has not changed. With an ageing population, caused by decreased birth rates and an outflow of the country's younger population to the United States, occurrences of chronic diseases are increasing dramatically. However, the government is taking proactive measures to reduce this costly burden in the future, exemplified by the proposal of a 'fat tax' for parents of obese children.

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Telecommunications

Puerto Rico Telecommunications

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BMI View: The announcement of the IPO by pan-Caribbean operator Digicel bodes well for the future of the region, with additional funds raised for investment in next-generation networks, converged services and further market expansion. However, it also demonstrates the saturated nature of the telecoms industry in the Caribbean, with revenue and subscriber growth flattening. A key downside risk is the company's exposure to weak consumer spending trends in its core markets, an issue that could undermine investor confidence further down the line. Haiti and Cuba represent the largest organic growth opportunities in the region, as both are significantly underdeveloped compared to their peers. However, the risks associated with business in these two markets mean that a mobile subscription boom is far from likely.

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Tourism

Puerto Rico Tourism

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BMI View: The ongoing economic uptick in the US will translate into rising departures to the Caribbean in 2015, with St Lucia, St Eustatius, the Cayman Islands and Cuba set to perform particularly well. We see particular opportunities in Cuba, with the US-Cuba diplomatic rapprochement boosting prospects for a relaxation of the bilateral tourist regime.

We forecast mixed fortunes for the Caribbean in 2015, with most islands seeing growth in tourist arrivals but a few registering declines. The latter include Barbados (0.6%), Bonaire (6.1%), the Dominican Republic (1.5%) and St Vincent (1.6%). We believe that these declines reflect the drop of 1.2% in arrivals from Europe in 2015, with these economies usually registering strong arrivals from Europe. However, overall the Caribbean will see a net increase in tourist arrivals in 2015, as improving consumer confidence in the US leads more US tourists to visit the region,...

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