Puerto Rico is ranked as Caribbean’s high-income economy and Latin America’s most competitive economy. Puerto Rico has a highly educated and skilled workforce and is considered a customs territory of the US making it possible for the companies from the US to establish in Puerto Rico. The economy is considered highly vulnerable to changes in the world economies due to the dependence on imported goods such as food materials as well as industrial raw materials. The economy shifted from a primarily agricultural economy to an industrial economy and is gradually transitioning through the information age.
Overview Of The Economy Of Puerto Rico
The financial year begins on July 1st and ends on May 31st. Puerto Rico has a GDP of $101.5 billion and ranks 60th by nominal GDP. The GDP growth rate was at -0.6 as of 2013. The GDP per capita by purchasing power parity (PPP) is 34,938. Manufacturing sector contributes 46.4% to the GDP per capita followed by finance, insurance and real estate at 19.6%, services at 12.5%, government sector at 8.6%, then trade 8%, transportation and other public utilities 2.9%, construction 1.7% and agriculture contributing 0.6%. The country has an inflation rate of 2.47%, and an unemployment rate of 13.7%. Approximately 45% of the population live below the poverty line making Puerto Rico one of the poorest countries in the Americas. The service industry, the government, and trade are the leading employers in the country. An estimated 1.286 million people form part of the laborforce. The public debt is at $67.7 billion which is 66% of the GDP. The country earns revenue of $31.3 billion against expenses of $29.1 billion.
The Main Industries Of Puerto Rico
Puerto Rico’s major industries are mainly set up by US investors. These industries include electronics, pharmaceuticals, textiles, and clothing, petrochemicals and food processing industries, finance, real estate tourism and insurance service industries.
Main Export Goods Of Puerto Rico
Puerto Rico earns an estimated $64.88 billion from its exports. The country’s primary exports include chemicals, pharmaceuticals and medical equipment, electronic goods, rum, beverage concentrates, canned tuna, and apparel.
Main Export Partners Of Puerto Rico
Puerto Rico exports its goods mainly to the US 90.3% of its total exports UK, Dominican Republic and Netherlands are other export destination.
Main Import Goods Of Puerto Rico
Imports take up about $44.67 billion. The major imports include food and fish, chemicals, machinery,
Main Import Partners Of Puerto Rico
Puerto Rico imports its goods mainly from the US accounting for 55% of the total imports. Other partners include Ireland and Japan.
Challenges To The Economy Of Puerto Rico
The Jones Act which charges high shipping costs for foreign ships docking in Puerto Rico’s Ports raises the cost of doing business making the country less competitive compared to other Caribbean countries. Attempts by the government to have the act amended by the US Senate have failed. Puerto Rico has complex labor laws that make it difficult to do business in the country. High taxation also affects the locals and businesses negatively. The inefficient government system has also been blamed for its laxity in the exploitation of locally available resources including importing food while the country has fertile lands.
Plans by the government to reduce the country’s overreliance on imported fossil fuels through the exploitation of its rivers to produce hydroelectric power. Other power options the country plans to exploit include biofuel, biomass, and geothermal power.