Puerto Rico’s federal overseers are poised to raise their forecast for the island’s budget surplus over the next four decades after an influx of aid and rebuilding from last year’s storm is expected to give a jolt to the economy, Bloomberg reported. The change will increase Puerto Rico’s cumulative surplus — before any debt payments are made — to more than $20 billion through 2058. The jump is likely to please the island’s creditors, who are fighting for a piece of Puerto Rico’s revenues as it makes its way through bankruptcy. Yet such long-term fiscal projections have proven to be especially volatile, and the new estimates will follow an admission that the board made a $4 billion error the last time it certified a fiscal plan. The estimates will provide the latest signal that the island is recovering better than analysts initially expected from the blows of Hurricane Maria in 2017. Since the storm, Puerto Rico and its federal overseers have redrawn the government’s fiscal plan and the projections several times to account for the influx of federal aid that’s expected to temporarily buoy the economy. The more sanguine outlook, and the government’s progress toward cutting deals with some major creditors, has triggered a rebound in the price of its debt, with its most frequently traded general-obligation bonds more than doubling this year. The last fiscal plan estimated that Puerto Rico would have a cumulative surplus of about $4 billion over the next 40 years, assuming that the government implemented budget cuts, among other moves. The new projection, incorporating higher-than-expected disaster aid and tax receipts, raises that figure to more than $20 billion.
