Economic Analysis - Crib Sheet: Puerto Rico Begins Long Road To Recovery - 18 DEC 2017
Recent developments in Puerto Rico have increased our conviction that the territory faces a long road to recovery in the wake of hurricanes Irma and Maria, which made landfall in September. The storms were a heavy blow to an economy that we already expected would experience a "lost decade" in the years ahead, with damage estimates approaching USD100.0bn. Below, we highlight the most crucial developments on the island since our last crib sheet ( see ' Crib Sheet: Grim Outlook Following Hurricanes ' , October 6), and outline our key views on Puerto Rico's economic and political trajectory.
Conditions on Puerto Rico remain fragile nearly 3 months after Hurricane Maria made landfall. While water is almost fully restored across the island, power is still only 68.4% restored, and there have been multiple large-scale outages in recent weeks. The military has wound down its operations on the island, as efforts shift towards the recovery phase. Economic activity has started to return to the island as well, but damage to infrastructure and outmigration will likely keep the economy subdued for a substantial period of time.
Bond Market In Free Fall Puerto Rico - S&P Municipal Bond Total Return Index, Mid-Pirce Source: Bloomberg, BMI
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