Puerto Ricans pessimistic about Puerto Rico's economy

92% of those surveyed by the Institute for Economic Liberty believe that the country's economic course is "bad" or "very bad".

Puerto Ricans pessimistic about Puerto Rico's economy

Photo: El Vocero

Even with the economic growth that the country has registered and the allocation of millions in federal funds, Puerto Ricans indicated that they have a pessimistic perception of Puerto Rico's economy, both now and in the future, according to a study by the Institute for Economic Liberty (ILE).

In the report, The Free Market in Puerto Rico 2022, published yesterday, 88% of those surveyed responded that Puerto Rico's economic situation is "bad" or "very bad," while 92% believe that the direction of the country's economy is also "bad" or "very bad.

"We didn't know how high that percentage was and, according to our study, that's how the sample sees it," said Ángel Carrión, ILE's director of Research and Public Policy.

The Secretary of the Department of Economic Development and Commerce (DDEC), Manuel Cidre, reacted to EL VOCERO and said that this perception could be due to the increase in the cost of living caused by inflation and not by governmental management, given that the economic indicators -such as the average salary of $15, unemployment at 5.8%, and labor participation at 44%- show that there has been an improvement.

"The economic indicators in Puerto Rico are flattering, but there is one area that we cannot control and it is called inflation," Cidre said.

"I haven't seen the study, but I'm pretty sure that many of the answers in that study are based on an unquestioned reality, that the cost of living has gone up significantly and is not in our control," he continued.

The report highlights that 58% of those surveyed indicated that the government has the greatest weight in Puerto Rico's economy.

For his part, Juan Lara, co-author of the ILE study, stated that Puerto Rico has an economic bubble sustained by federal funds for the reconstruction of the country, which is why he urged the government to create an economic development plan to prepare the island for when the external funds run out in three or four years.

"Right now, we are in a bubble where the economy is doing comparatively well and where it is not a private initiative or the free market that is producing that result," Lara abounded.

"Everyone in Puerto Rico says that this plan has to be done and I have never seen anyone who does not give it priority importance when talking about Puerto Rico's economy into the future. However, it is a plan that is not yet taking shape and time is running out," he added.

However, for Cidre, the economic development plan underway does not depend on federal funds and is based on strengthening the island's competitiveness in terms of talent, access to capital, permits, incentives, financial environment, connectivity and logistics, which would strengthen the country's commercial sectors.

"Puerto Rico's economic development is not based on federal funds. The funds are the seed money that will help us advance some areas that are necessary for competitiveness," Cidre reacted.

Doubtful of social assistance

According to the study, Puerto Ricans indicated that social assistance programs are not effective, because more than 80% believe that they are not designed to lift people out of poverty.

In addition, three-fourths of those surveyed believe that public assistance only satisfies people's basic needs while they are poor, and two-thirds expressed that it does not provide beneficiaries with the opportunity to fend for themselves.

However, 99.6% of the sample recognized that consumers should have the freedom to make decisions in the pursuit of their well-being, even though in Puerto Rico economic freedom is not given the importance it deserves.

This News article was originally published in Spanish in El Vocero.

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