#1Puerto Rico Economic Profile DR. JOSÉ CARABALLO CUETO ESCUELA GRADUADA DE ADMINISTRACIÓN DE EMPRESAS UPR-RÍO PIEDRAS#2Source: EDB. 160 EDB Economic Activity Index Historical Graph from January 1980 to May 2023 (Preliminary Estimates: 10/2022- 6/2023) Index (January 1980=100) 100 90 90 80 60 Jan-80 Dec-80 150 140 130 Recession Periods EDB-EAI 120 Recession 1991 Nov-81 Oct-82 Sep-83 Aug-84 Recession 1979-83 Hurricane Hugo Sept. 1989 Jul-85 Jun-86 May-87 Apr-88 Mar-89 Feb-90 Jan-91 Dec-91 Nov-92 Oct-93 Sep-94 Aug-95 96-Inf Jun-97 May-98 Apr-99 Mar-00 Feb-01 Recession 2001 Hurricane Georges Sept. 1998 Jan-02 Dec-02 Nov-03 Puerto Rico's Fiscal Crisis, Subprime Mortgage Market Meltdown COFINA, ARRA Funds, Medicaid Funds Local Stimulus Program Tax Reform Act 154 Excise Tax Hurricanes Irma & María Sept. 2017 Earthquakes COVID-19 Pandemic Oct-04 Sep-05 Aug-06 Jul-07 Jun-08 May-09 Apr-10 Mar-11 Feb-12 Jan-13 Dec-13 Nov-14 Oct-15 Sep-16 Aug-17 Jul-18 Jun-19 May-20 Apr-21 Mar-22 Feb-23 Hurricane Fiona Sept. 2022 8/4/2023 The complete series of the EAI concurs with the economic cycles of the Puerto Rico's economy. It starts in January 1980 and exhibits the recession of FY1979 to FY1983, the subsequent recuperation period, the mild recession of FY1991 with its expansion phase, and the recession of 2001. It also shows the downward path of the Index since the beginning of the 2006 recession with a recuperation episode in 2012, after which the EAI resumed its descendent trend in 2013. The collapse experienced after hurricanes Irma and Maria struck the Island in September 2017, and the subsequent effect of the recovery efforts are also displayed. The last drop corresponds to the January 7th, 2020, earthquakes and its related aftershocks, compounded by the burdens that the COVID-19 global pandemic stresses on the economic activity. Now Puerto Rico's economy is entering a recovery period that is at pre-Hurricane Irma and Maria levels. Go to Contents ECONOMIC DEVELOPMENT BANK 18 FOR PUERTO RICO MENT 409 PUERTO RTO RIC#30 15 10 5 5 25 20 35 30 Net federal transfer % GNP 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020#4Total Population, 2010-2022 3725789 3678732 3634488 3593077 3534874 3473232 0667-2 3325284 3,281,562,693 31933 193553 3,221,789 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022#520000 0 -20000 Net Outmigration 7733 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 -3,781 -26,447 -40000-53776 -60000 -54784- -49883 -80000 -65089 -100000 -120000 -140000 -64757 -78188 -68278 -123399 -26247#645000 41243 40000 40282 37871 35717 35000 32967 30000 30109 25000 20000 15000 10000 5000 26233 22151 21503 19996 19,09019,645 2015 2016 2017 2018 2019 2020 2021 2022 0 2011 2012 2013 2014 ⚫na cimientos muertes Nacimientos y muertes, 2011-2022#7PR lost 11.8% inhabitant between 2010 to 2020. Guayanilla Municipio, Puerto Rico 17,784 21,581 -3797 -17.6% Cataño Municipio, Puerto Rico 23,155 28,140 -4985 -17.7% Mayagüez Municipio, Puerto Rico 73,077 89,080 -16003 -18.0% Yauco Municipio, Puerto Rico 34,172 42,043 -7871 -18.7% Arroyo Municipio, Puerto Rico 15,843 19,575 -3732 -19.1% Guayama Municipio, Puerto Rico 36,614 45,362 -8748 -19.3% Yabucoa Municipio, Puerto Rico 30,426 37,941 -7515 -19.8% Loíza Municipio, Puerto Rico 23,693 30,060 -6367 -21.2% Maricao Municipio, Puerto Rico 4,755 6,276 -1521 -24.2% Guánica Municipio, Puerto Rico 13,787 19,427 -5640 -29.0%#8Municipalities with lowest loss Rincón Municipio, Puerto Rico 15,187 15,200 -13 -0.1% Culebra Municipio, Puerto Rico 1,792 1,818 -26 -1.4% Naranjito Municipio, Puerto Rico 29,241 30,402 -1161 -3.8% Barranquitas Municipio, Puerto Rico 28,983 30,318 -1335 -4.4% Aibonito Municipio, Puerto Rico 24,637 25,900 -1263 -4.9% Isabela Municipio, Puerto Rico 42,943 45,631 -2688 -5.9% Dorado Municipio, Puerto Rico 35,879 38,165 -2286 -6.0%#9Viviendas vacantes, 2020 50.2% 35.0% 33.5% 33.1% 32.2% 29.1% 29.1% 28.3% 23.4% 1,598,159 total de unidades de vivienda en todo PR. 257,625 vacantes o 16.1%. Municipios con tasas mayores: Culebra Municipio, Puerto Rico Ceiba Municipio, Puerto Rico Guánica Municipio, Puerto Rico Vieques Municipio, Puerto Rico Luquillo Municipio, Puerto Rico Rincón Municipio, Puerto Rico Fajardo Municipio, Puerto Rico Cabo Rojo Municipio, Puerto Rico Río Grande Municipio, Puerto Rico#10Total employment, July 988 979 982 972 965 1,105 1,081 1,056 ,036,042 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024#11Labor Market#12Self-employment, July 144 167 190 191 180 183 185 159 152 140 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024#13Shares of employment: María & pandemic Sector Junio 2017 Junio 2020 Government 16.7 15.9 Services 29.7 28.9 Transportation and 4.7 3.7 Communications FIRE 4.2 3.2 Manufacturing 7.6 8.7 Trade 19.0 19.6 Construction 2.7 4.4 Self-employment 13.5 14.9 Agriculture 1.9 0.9#14Global Entrepreneurship Monitor (GEM) Encuesta entre octubre 2020 y febrero 2021. a percepción de la población adulta en relación con las buenas oportunidades para emprender en su área aumentó de 39.4% en 2019 a 60% en 2020. 66.5% considera que tienen la capacidad para emprender: porcentaje más alto alcanzado en este indicador desde el 2013 e incluso un poco mayor a los Estados Unidos (64.0%) en este periodo. ntención de emprender en los próximos tres años subió de 23.9% en 2019 a 26.1% en el 2020. Sin embargo, sólo el 31% de los encuestados considera que es fácil comenzar un emprendimiento en Puerto Rico (América Latina y el Caribe 42.2%, en promedio y Estados Unidos 68.6 %). "No obstante, brecha entre emprendimientos nacientes y nuevos en Puerto Rico apunta a que existen serios obstáculos en el proceso de emprender en nuestro entorno ya que un porcentaje muy alto de los esfuerzos por emprender no alcanzan la próxima fase. Esta es una situación que no se observa en ningún otro país participante. La tasa de empresas consolidadas – con más de 3.5 años de vida- también aumentó de 1.3% en 2019 a 2.8% en 2020. A pesar de este aumento, aún es una tasa baja en el contexto internacional: número 41 de 44 países participantes en 2020."#15Wages, establishments and payroll employment in the pandemic Whole private average weekly sector quarters establishments employment wage 2020 1 44,836 682,697 $533 2020 2 43,504 604,474 526 2020 3 44,163 635,947 522 2020 4 44,979 680,039 599 2021 1 45,664 663,894 544 2021 2 45,814 677,079 546 average weekly Retail Sector quarters establishments employment wage 2020 1 8,623 123,344 $372 2020 2 8,375 110,752 373 2020 3 8,500 118,797 397 2020 4 8,578 129,627 488 2021 1 8,717 123,895 402 2021 2 8,764 127,889 417#16Hires rate 1 2 3 st Hires are greater than quits in all sectors while lower wage sectors experience higher levels of quits and hires Hires and quits rates by major sector, November 2021 ST 7 6 9 Arts, entertainment, and recreation Accommodation and food services 8 Construction Professional and business services Retail trade Transportation, warehousing, and utilities Other services Nondurable goods manufacturing Information Financial activities 45-degree line 0 0 1 2 3 4 5 6 7 8 9 Quits rate Notes: The private-sector hourly wage rates correspond with the size of the bubbles (the smaller the bubble, the lower the wage rate). The 45-degree line represents where hires rates are equal to quits rates. Source: EPI analysis of Bureau of Labor Statistics Job Openings and Labor Turnover Survey and Current Employment Survey public data series.#17Other data#18Recaudos netos al fondo general, meses junio 142-141.7 9787-928.5 995,6 737.2 435.1 1,355-317.7 2015 2016 2017 2018 2019 2020 2021 2022 2023 Todos aumentaron menos arbitrios a corporaciones#19Cambio interanual en generación eléctrica, AF2023 5.0 0.0 -5.0 -10.0 -15.0 -20.0 -25.0 -30.0 JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL MAY JUNE#20Inflation, FY2023 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL MAY JUNE#21Registros en hoteles y paradores, AF2015- 2022 5000 4611.2 4694.1 4662 4500 4470.3 4000 4096.4 3709.5 3713.5 3722.4 3500 3000 2500 2000 1500 1000 500 0 2015 2016 2017 2018 2019 2020 2021 2022#2247.0% 46.0% 45.0% 44.0% 43.0% 42.0% 41.0% 40.0% 39.0% 38.0% 37.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Poverty Rates, 2005-2022#23Conclusions and Recommendations Weak economic growth ► Exclusive economic growth Thus, poverty increased Import substitution and export All the sectors have profitable niches Let PAN & Medicaid participants work more ►Thanks