Macroeconomic Forecast Puerto Rico

Puerto Rico's unemployment rate ticked down to 16.8% in May from 16.9% in April. While we believe that Puerto Rico's unemployment rate will drop slightly to 14.0% by year-end as the economy records flat real GDP growth after three successive years in recession, we caution that there is no end in sight to the country's endemic unemployment problems, with the participation rate continuing to drop lower. Indeed, with the government committed to continuing to cut jobs from the island's bloated public sector, we caution that tough times remain in store for the territory's workforce.

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