The Financial Oversight and Management Board (FOMB) announced that it presented the proposed 2021 Fiscal Plan for the Commonwealth of Puerto Rico for certification. The members of the Oversight Board will consider certification of the 2021 Fiscal Plan during their public board meeting today via videoconference.
The 2021 Fiscal Plan is the road map for Puerto Rico’s recovery and prosperity. Puerto Rico’s economy is benefitting from substantial federal funds related to COVID-19 pandemic support and Hurricane Maria-related disaster funds for several years. In total, this is estimated at $120 billion in federal funds.
This 2021 Fiscal Plan outlines government actions necessary to ignite long term economic growth, while improving fiscal responsibility. “After years of recession, numerous natural disasters and this tragic pandemic, Puerto Rico is finally seeing the fruits of economic recovery,” said the Oversight Board’s Executive Director Natalie Jaresko. “Significant federal funds responding to the challenges created by COVID-19, an acceleration in the disaster recovery process, and progress in the debt restructuring process are all contributing toward renewed fiscal stability and an end to Puerto Rico’s bankruptcy.”
“This is an opportunity to build a stronger economy with greater growth to benefit all residents, while building a more resilient infrastructure,” Jaresko said. “If we use this time and the resources wisely, we can put Puerto Rico on a path towards a better, more prosperous future.”
However, its long-term economic outlook remains challenged in the absence of incremental structural reforms to improve Puerto Rico’s competitiveness and its ability to attract greater levels of investments in quality job creation for its residents. The 2021 Fiscal Plan projects the government budget to fall into deficit by 2036 without incremental actions or policy changes.
The 2021 Fiscal Plan includes significant investments into healthcare, broadband coverage, and civil service reform, and continues to prioritize government spending so the size of government both reflects the population changes and meets the needs of the people for effective services.
Gov't's Fiscal Plan Presented in March
As reported by THE WEEKLY JOURNAL, the Puerto Rico government presented its Fiscal Plan in March.
That plan states that the stimulus on the island was greater than anticipated and was executed at a faster rate than expected.
It was estimated that this total stimulus from the CARES Act along with the aid packages from the government of Puerto Rico have exceeded $14 billion.
This represented roughly 20 percent of the island's gross national product and included significant direct aid to households, the most immediate form of economic stimulus, such as the expansion of unemployment benefits, the program to protect wages and direct payments to citizens.
In terms of disaster relief funds, the estimated total in that plan was $86 billion, spanning from fiscal year 2018 through fiscal year 2032.
- Read more about the Fiscal Plan in the next issue of THE WEEKLY JOURNAL.