Bureau of Economic Analysis confirms Puerto Rico’s GDP up 0.3% in ’19
Real gross domestic product (GDP) increased 0.3% in 2019 after decreasing 2.4% in 2018, according to estimates released by the Bureau of Economic Analysis (BEA). The statistics released are BEA’s first official release of GDP for Puerto Rico.
The release includes updated estimates for 2012 to 2018 that incorporate new and additional source data and methodology improvements to the prototype GDP statistics that were released in September 2020, as News is my Business reported.
The increase in real GDP in 2019 reflected an increase in exports. Although private inventory investment, government spending, and consumer spending declined, these decreases were largely offset by a decrease in imports, which is a subtraction item in the calculation of GDP.
Pharmaceuticals and organic chemicals were the largest contributors to both the growth in exports and the decline in imports in 2019. Exports increased 0.7%, while imports decreased 9.1%. The primary contributor to the decrease in private inventory investment was the chemical manufacturing industry, which includes pharmaceutical manufacturers.
Government spending decreased 11.4% in 2019 as spending on disaster recovery activities slowed. The largest decline was in gross investment in structures by the central government as major repairs to the power grid, which was damaged in 2017 by Hurricanes Irma and Maria, were completed in 2018.
Consumer spending decreased 0.5% in 2019. Purchases of durable goods decreased 3.6% as disaster-related insurance payouts and government payments to households, which supported consumer spending in 2018, declined.
Puerto Rico GDP includes production owned by nonresidents, such as nonresident multinational enterprises. In Puerto Rico, subsidiaries of large nonresident multinational enterprises operate within the pharmaceutical manufacturing industry, as well as the medical device manufacturing and computer services industries.
As part of the transition from prototype to official statistics, BEA is instituting a routine release and update cycle for these estimates that is like other BEA data products, it said.
Much of the source data that BEA uses to prepare the Puerto Rico GDP estimates is drawn from administrative or survey data that, over time, will provide more comprehensive or relevant information, the agency noted.
Because Puerto Rico is not included in most of the major surveys used by BEA to estimate US national GDP, it relied on a number of local government agencies, namely: the Economic Development Bank for Puerto Rico, Office of Economic Studies; the Office of the Commissioner of Insurance of Puerto Rico; the Department of Economic Development and Commerce; the Treasury Department; the Puerto Rico Electric Power Authority; the Puerto Rico Industrial Development Company; the Puerto Rico Institute of Statistics; and the Puerto Rico Planning Board.