Puerto Rico lowers economic growth projections amid rising unemployment

The Puerto Rico Planning Board has lowered its economic growth projections for the island, forecasting 0.3 percent growth for fiscal year 2026 and 0.2 percent for 2027. Despite this downward revision, officials expect real GDP to remain positive, driven by reconstruction efforts, tourism, and the relocation of manufacturing operations to the island.

Potential economic pressures identified include a gradual reduction in federal disbursements, changes in U.S. economic policy, tariffs, interest rates, inflation, and oil prices.

In terms of labor, employment in Puerto Rico grew by 0.9 percent in August, adding 8,700 jobs compared to the previous year—the highest increase in 24 months. However, the adjusted unemployment rate rose from 6.0 percent to 6.1 percent, marking its highest level since 2023. This increase in unemployment is attributed to a surge in the labor force that outpaced job creation. Growth was most notable in the recreation and accommodation, education, and health services sectors, while professional and commercial services saw a decline.