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Puerto Rico faces economic, social challenges in 2025-2029

Estudios Técnicos warns of major concerns, from energy costs to demographic shifts.

As Puerto Rico enters a new four-year period, significant economic, social, and environmental challenges loom on the horizon. According to the latest issue of “Perspectivas,” a publication by Estudios Técnicos Inc., the island faces a “critical juncture” in its development.

The interaction of global economic trends, demographic shifts and policy decisions will shape the island’s trajectory through 2029, the consulting firm stated in its publication.

One of Puerto Rico’s most pressing challenges is revitalizing economic growth. Despite strong job creation in recent years, the island’s economic activity index contracted by 0.2% in 2024, indicating a slowdown. High volatility in global markets, including fluctuating oil and food prices, further complicates recovery efforts.

Energy remains a major concern, with Puerto Rico continuing to bear high electricity costs. The Trump administration’s preference for fossil fuels contradicts local policies aimed at transitioning to renewable energy.

Additionally, the exit of consumers from the Puerto Rico Electric Power Authority’s (PREPA) grid exacerbates the utility’s financial troubles. A recent court ruling granting bondholders the right to claim PREPA’s future revenues only adds to the island’s economic uncertainty.

Meanwhile, rising construction costs pose another challenge. The price of construction materials has surged by 35% over the past three years, impacting housing, infrastructure, and commercial real estate development. This inflationary pressure, combined with high interest rates, limits investment potential and worsens the island’s housing crisis.

Puerto Rico also faces increasing competition from neighboring Caribbean and Central American nations, which offer lower labor and energy costs. Additionally, proposed tariff increases on Chinese and Mexican goods by the Trump administration could trigger inflationary effects, further straining the local economy.

Demographic shifts present another major obstacle. Puerto Rico’s population is not only shrinking but also aging rapidly. By 2030, nearly 30% of the island’s residents will be older than 65. This trend raises concerns about workforce sustainability, health care services and retirement funding. The low birth rate and continued migration to the U.S. mainland further weaken Puerto Rico’s labor market.

Social inequality remains entrenched. The island has long struggled with high poverty rates, particularly among children and the elderly. While federal assistance programs have provided relief, recent policy changes threaten their stability. For instance, Medicaid funding under the Affordable Care Act is set to expire in 2028, which could leave thousands without health care coverage.

The education system is also under strain, with only 29% of Puerto Ricans holding a bachelor’s degree. Limited access to quality education and professional training stifles upward mobility and economic progress. Additionally, health care institutions are grappling with staff shortages due to the emigration of medical professionals and declining financial support.

Environmental and technological challenges
Climate change remains a critical issue for Puerto Rico. Estudios Técnicos projects the island could suffer economic losses of up to $379 billion by 2050 due to climate-related damages. Rising sea levels, extreme weather events, and coastal erosion pose significant risks to infrastructure and public safety. Policymakers must balance environmental sustainability with economic and social needs to ensure long-term resilience.

On the technological front, artificial intelligence is emerging as a double-edged sword. While AI has the potential to drive efficiency and innovation, Puerto Rico lacks a robust framework to regulate and integrate it effectively. The rapid adoption of AI in business, health care and logistics necessitates urgent investments in education and workforce development to keep pace with evolving job market demands.

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1 Comment

  1. Allan⁰ January 31, 2025

    The reason Puerto Rico is lacking alot of is due to big corps and the PR government at keeping wages very low and exploiting the people With unfair wages and benefits.The other problem is the Jones act which only give 2 company control just like Hawaii of all goods coming and going.Buy doing all this the young ones go to the main land to maintain a better life.It also give maga rich the money to move in and buy up property and rent out as Air BNB’S property value goes up so high and rent follows which destroys the market value for most locals here.The hospitals are another people the pay doctors and nurses so low of a wage the move to the main land I take to a few nurses and they get like 15.00 a hour GOT to the state and they can make what they make in a week here in one day in the states same with alot of doctors. FUNNY THING IS THESE HOSPITALS ARE OWNED BY THE ONES IN THE STATES.So yes they are ruining the Island to take it for the rich just like Hawaii.Make them a state give them the same playing field people there have.Quite exploring these beautiful people.

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