Héctor Morales, president of Puerto Rico's Planning Board (JP), announced Wednesday updated economic growth projections showing near-flat growth for fiscal years 2026 and 2027. The JP now forecasts the island's Gross National Product will grow just 0.3% in FY2026 and 0.2% in FY2027, a downward revision of 10 basis points from projections made in January 2026. The board released the estimates via press release rather than the usual press briefing.
The analysis factored in national and global economic performance, construction and equipment investment, personal consumption, federal transfers, exports, visitor spending, population, price levels, interest rates, and oil costs. The JP stated economic activity would remain positive despite declining federal disbursements, shifts in U.S. economic policy, tariffs, interest rates, inflation, and oil prices. However, the Economic Activity Index (IAE), reported by the Department of Economic Development and Commerce (DDEC), has been negative for the past two fiscal years, declining 0.6% in 2025 and 0.4% in 2026.
A recent JP report found the tariff war raised manufacturing production costs by 1.92% and construction costs by 33.7% on the island. The JP highlighted government initiatives to diversify tourism offerings, boost international promotion, and attract high-profile artistic, cultural, and sports events.