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  • Writer's pictureThe San Juan Daily Star

Planning Board projects economic growth in 2003-04, based in part on estimated inflation slowdown

Puerto Rico Planning Board Chairman Julio Lassús Ruiz

By The Star Staff

The Puerto Rico Planning Board projects growth in Puerto Rico’s economy of 0.3% and 0.8% for fiscal years 2023 and 2024, respectively, revealed the board’s chairman, Julio Lassús Ruiz, noting that “the projections are based, among other variables, on the slowdown in inflation.”

Lassús Ruiz stressed that “these projections are part of the Chapter of the Economy of Puerto Rico for the Budget Process 2023-2024 and although they are preliminary, the agency is working on the final stage of balancing the social accounts for fiscal year 2022, and these estimates will be subject to an eventual revision for fiscal years 2023 and 2024.”

The projections were made based on a valuation exercise using the econometric relationship of real gross product based on the Economic Activity Index as detailed in the aforementioned document, Lassús Ruiz added.

Among the main variables of the projections considered were fiscal plans where federal funds from hurricanes, earthquakes and the COVID-19 pandemic have positively impacted the performance of the economy. Fiscal year 2023 was projected to slow down from fiscal year 2022, due to the effect of rising inflation and the possibility of a global recession. The estimated inflation for fiscal year 2023 is 3.3%, according to the Financial Oversight and Management Board. According to the island Department of Labor and Human Resources, inflation as of February 2023 was estimated at 6.3%. In the case of fiscal year 2024, the Planning Board projects growth of 0.8%, also due to an estimated slowdown in inflation. According to the oversight board’s estimated data for fiscal year 2024, inflation will be 2%.

“We have always stated in our economic projections publications that these projections are subject to revision,” Lassús Ruiz said. “Our commitment to transparency and access to them is part of our mission to provide reliable data to the government, the private sector and citizens so that the best decisions can be made for the future.”

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