Financial health of consumers worsened in 2025

Economist Leslie Adames

By THE STAR STAFF

The financial health of Puerto Rican consumers worsened in 2025, according to a new report released this week by Estudios Técnicos Inc.

The firm’s Consumer Financial Fragility Index rose over the year, reflecting increases in loan delinquencies, personal bankruptcies, and unemployment across the island.

Economist Leslie Adames noted in a written statement that the index climbed from 0.33 in the first quarter to 0.46 in the fourth quarter, showing “continued deterioration in consumers’ financial position, with no signs of stabilization.”

The index, which measures financial fragility on a scale developed by Estudios Técnicos, is based on five indicators: delinquencies of 30 to 89 days on consumer and mortgage loans, unemployment, personal bankruptcies, and inflation-adjusted real annual income. The latest reading of 0.46 places Puerto Rico in the moderate financial fragility range.

Personal bankruptcies rose from 904 in the first quarter to 962 in the third, before falling back to 926 in the fourth quarter. Meanwhile, the unemployment rate increased from 5.4% to 5.7% over the same period.

Despite a modest increase in inflation-adjusted real annual income -- from $24,069 to $24,714 -- Adames said the gain was not enough to counteract negative trends in other areas.

Delinquency rates worsened across several loan categories. Consumer loans past due by 30 to 89 days rose from 2.70% to 3.47% over the year. Mortgage delinquencies increased from 1.18% to 1.36%, credit card delinquencies climbed from 2.31% to 2.48%, and auto loan delinquencies jumped from 2.77% to 3.72%.

Adames noted those rates were higher than the average of the last five years, adding that the extra liquidity from federal stimulus programs during the pandemic is now gone, making it harder for consumers to keep up with spending and debt payments.

Looking ahead, Adames warned that several risks could further weaken consumer finances in 2026. They include rising consumer debt, ongoing inflation, changes in U.S. tariff policy, and the restructuring of the Puerto Rico Electric Power Authority’s debt -- which could lead to higher costs for households and businesses.