No Escape From Structural Fiscal Deficit

BMI View: We expect Puerto Rico to continue running a structural fiscal deficit for years to come, meaning the commonwealth will remain dependent on debt issuance and funding from the US Federal authorities. Therefore, while ongoing attempts to cut government expenditure while continue to boost social tensions on the island, the weak fiscal outlook implies municipal borrowing costs to remain higher than in most US states, making it harder for the government to meet its debt serving costs in the future.

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