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.
Puerto Rico Country Risk
Bermuda's prolonged recession continued into 2014, and we now expect this economic contraction to continue over the coming years. We expect that an international crackdown on offshore financial centres such as Bermuda will lead to a decline in financial services activity, one of the key contributors to the island's economy. Although tourism will rise, it will not be enough to offset tempered insurance activities.
Bermuda's current account will remain in surplus over the course of our 10-year forecast period, though the surplus will decrease to 10.4% of GDP by 2024, down from 17.4% in 2014, in line with our projections for slowing exports of tourism services and secular decline in off-shore finance.
Despite poor growth prospects, Bermuda will remain politically stable over the next 10 years owing to the...
Puerto Rico Country Risk
Growth in the Dominican Republic will moderate amid declining gold output, but relatively robust private consumption and tourism will help sustain the economy.
Puerto Rico's fiscal crisis will result in decreased government spending, lower household consumption, and increased emigration, all weighing on growth.
The Cuban economy holds immense potential given the island's large size and proximity to lucrative US markets. However, investment and growth will depend on political dynamics on both sides of the Florida Straits.
Major Forecast Changes:
Puerto Rico will undergo a painful internal devaluation, leading to the continuation of its recession over the next five years. This devaluation will see wages fall and lay-offs...
Puerto Rico Industry Coverage (4)
Food & Drink
Puerto Rico Food & Drink
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 Dominican Republic and Jamaica will outperform other regional markets over the next five years. Nonetheless, small consumer bases will limit long-term investment opportunities.
|Dominican Republic The Regional Outperformer|
|Select Countries - Food Sales Growth (% chg y-o-y, USD terms)|
Pharmaceuticals & Healthcare
Puerto Rico Pharmaceuticals & Healthcare
BMI View: Despite short-term headwinds due to fiscal tightening, Puerto Rico's pharmaceutical market is expected to observe modest positive growth over the next five years. This slightly improved outlook already represents a recovery trend against the negative market growth patterns observed in recent years. Over the next few years, Puerto Rico's increase in funding through the Medicaid programme and key changes to the healthcare policy will act as main drivers of pharmaceutical growth. That said, we expect the effects of healthcare coverage expansion on market growth to be partially counterbalanced by continuing cost control measures and an increasing use of generic drugs.
Headline Expenditure Projections
Puerto Rico Telecommunications
BMI View: 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.
Cayman Islands has the highest mobile penetration, at 153.4% in 2015, while Cuba's penetration rate remains below the regional average, at 28.9%.
The number of mobile lines in Cuba reached the 3mn mark in Q215, up from 2.4mn lines at the start of 2015, according to data published by state-owned telecoms operator Empresa de Telecomunicaciones de Cuba (ETECSA). The increase was mainly owing to a promotion, called Si activas ganas 30, wherein new users obtained USD30 in credit for activating a...
Puerto Rico Tourism
BMI View: Arrivals growth in the Caribbean will pick up to 2.3% in 2016, reflecting improved visitor numbers from Europe and North America. The Dominican Republic, St Eustatius and Cuba are expecting the highest rate of arrivals growth, but all tourism markets will experience growth in 2016. However, the outbreak of the Zika virus from late 2015 could pose downside risks to 2016 arrivals forecasts.
We currently expect arrivals to the Caribbean to grow by 2.3% in 2016, to 33.5mn, reflecting an improvement from growth of only 0.6% in 2015. We expect the Dominican Republic, Cuba, St Eustatius and St Lucia to post the highest level of arrivals growth in 2016, at around 6%, but we note the positive sign that all Caribbean countries except St Vincent will experience arrivals growth in 2016, for the first time since the downturn....