Macroeconomic Forecast Puerto Rico

Puerto Rico's unemployment rate declined slightly to 15.2% y-o-y in November 2011, though the participation rate also declined to 40.5%. We do not see unemployment moderating significantly in 2012, as the tourism and pharmaceuticals industries continue to face headwinds. This view underpins our forecast for unemployment to end 2012 at 14.0% y-o-y. Furthermore, we believe persistently high unemployment will continue to drive outward migration higher in the coming years.

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