Estudios Técnicos: American Rescue Plan Act will shore up $10B for Puerto Rico
When President Biden signed American Rescue Plan Act (H.R. 1319), expectations were created in many in the United States and Puerto Rico that economic conditions will improve.
In a preliminary assessment, economic analysis firm Estudios Técnicos Inc. estimated that Puerto Rico will receive an amount close to $10 billion in funds from H.R. 1319.
A bit more than half will go to individuals in the form of an unemployment supplement and a $1,400 stipend to most families, while $2.4 billion will be assigned to the island’s government.
“There are allocations for which it is difficult to estimate the amounts that will impact Puerto Rico, and there are a number of major policy changes included in the law that will require detailed evaluation to gauge local impacts,” said Estudios Técnicos President José Joaquín Villamil.
“Welcome as these funds are, they’re temporary and do relatively little to improve Puerto Rico’s competitiveness in areas such as manufacturing, advanced services, tourism and agro-industry,” he said.
“Most of the funds will stimulate consumption and since most consumption goods are imported, the permanent impact on the overall economy is reduced,” he added.
The firm stressed that “Puerto Rico needs to adopt a carefully drafted roadmap for the medium and long terms once the reconstruction and the pandemic funds run out. No country has developed by stimulating consumption, least of all those with a very open economy such as ours.”