Puerto Rico grapples with US$73 billion debt
Tuesday, December 23 2014 @ 08:00 AM AST
Contributed by: elijose
The Puerto Rican economy continues to struggle while the government searches for ways to ease its burden of more than US$73 billion in debt, Barcelona-based FocusEconomics said in its latest Consensus Forecast for Central America and the Caribbean. FocusEconomics surveys economists from around the world and publishes forecasts by region.
In its December 2014 issue, FocusEconomics said on Puerto Rico: "The House of Representatives narrowly approved a bill on December 2 to increase taxes on crude oil by 68%. The proposed increase, which still must be approved by the Senate, would generate about US$178 million a year. The government intends to use the extra revenue to prop up its heavily-indebted public service providers and to provide some backing for a US$2.9 billion bond sale expected to take place in early 2015."
Puerto Rico needs the bond proceeds to pay back the Government Development Bank (GDB), its main source of financing, FocusEconomics said.
In September, annual inflation inched down to 0.3% (August: +0.4% year-on-year).