The austerity measures put in place over the past two years have reduced Puerto Rico’s deficit and spurred economic growth, Gov. Luis Fortuño and his Economic Development and Commerce chief said in separate speeches offered on Wednesday’s session of the National Leutenant Governors Association convention taking place in San Juan.
“It’s no secret we’ve all had to take extreme measures to redress the economic situation in our respective jurisdictions. Puerto Rico is no exception,” Fortuño said. “Due to the fiscal and economic situation the island was in at the beginning of this administration, with credit about to be classified as junk, we had to implement a series of initiatives through which we have put our house in order.”
The government cut operating costs by 10 percent, which included eliminating thousands of public-sector jobs, and reduced external contracts by 15 percent, among other steps taken.
“We have reduced the deficit left to us by more than three-quarters… and we are headed for its total elimination,” he said.
Meanwhile, EDC Secretary José Pérez-Riera explained how in January 2009 the government has dragging a $3.3 million deficit, equivalent to 44 percent of its annual revenue and the greatest, proportionally speaking, among all U.S. jurisdictions. At present, the public deficit stands at 7.1 percent and should close the gap in about two years, Pérez-Riera noted.
“Presenting our case to the NLGA allows us to show our colleagues from other jurisdictions in the United States, that with a solid plan and the ability to implement it, they can successfully reduce the deficit and restore economic growth to benefit their people,” he said. “Today, Puerto Rico is proof of that.”
Earlier this year, it was revealed that 36 other U.S. jurisdictions have higher deficits than the island does.
In his presentation, Pérez-Riera listed the government’s public-private partnerships, as well as permits, energy and tax reforms as “the current administration’s most outstanding economic development measures.”
“We are carrying out specific actions that are producing results and are seeing a period of economic recovery that we hope will continue in an upward trend in the coming years as we continue implementing the administration’s economic development plan,” he said.
While he mentioned that the island’s Economic Activity Index is showing positive signs, he failed to address the fact that the island’s unemployment rate still hovers at about 16 percent and that local cement sales — another key economic indicator — have been on a downward spiral for the better part of the past two years.