Puerto Rican Growth Forecast Revised Down On Power Outages

• While Fitch Solutions forecasts real GNP in Puerto Rico will grow 2.6% in FY2022 (July 2021-June 2022), up from an estimated -0.9% in FY2021, this is a downward revision from its previous forecast of 3.0% as a series of power outages will weigh on growth in H221.   
• Puerto Rico’s strong progress on vaccinations will fuel growth in the near term, while over the medium term, growth will be fueled by robust inflows of federal aid. 
• Growth will decelerate over the latter half of the coming decade, as federal aid fades and structural headwinds return to the fore, though the resolution of Puerto Rico’s bankruptcy offers upside to this long-term forecast.

(Source: Fitch Solutions)